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Aphria Inc. Announces Record Second Quarter Fiscal Year 2021 Results

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Reports Net Revenue of $160.5 Million, an Increase of 33% from Prior Year Quarter
Adjusted EBITDA of $12.6 Million Marks Seventh Consecutive Quarter of Increasing Positive Adjusted EBITDA
Cash Cost Per Gram Decreases for the Fifth Consecutive Quarter to $0.79
Completed Accretive, Strategic Acquisition of SweetWater

LEAMINGTON, ONJan. 14, 2021 /PRNewswire/ – Aphria Inc. (“Aphria,” “we,” or the “Company“) (TSX: APHA) (NASDAQ: APHA), a leading global cannabis-lifestyle consumer packaged goods company inspiring and empowering the worldwide community to live their very best life, today reported its financial results for the second quarter and six months ended November 30, 2020. All amounts are expressed in Canadian dollars, unless otherwise noted and except for per gram, kilogram, kilogram equivalents, and per share amounts.

“We are pleased with our second quarter results which reflect the strength of our diversified global cannabis and consumer packaged goods businesses,” said Irwin D. Simon, Chairman and Chief Executive Officer. “Our market leading adult-use cannabis brands and sales remained strong and our international medical cannabis sales are off to a solid start. We also advanced our long-term vision for building a global cannabis life-style consumer packaged foods company positioned for sustainable, profitable growth with the completion of our acquisition of SweetWater late in the second quarter. In addition to advancing our long-term vision and growth objectives, the addition of SweetWater is a cornerstone within our U.S. strategy and a strong complement to our existing Aphria business that we believe will return compelling financial benefits. We already hit the ground running by starting to build upon the strengths of each of our respective complementary cannabis lifestyle brands broadening our consumer reach and enhancing loyalty with existing consumers.”

Simon continued, “We remain excited about our recently announced definitive agreement with Tilray to combine to create the largest global cannabis company and are on-track to close the transaction in the second quarter of calendar year 2021. At Aphria, we continue to build on our strong foundation in Canada and internationally to capitalize on growth opportunities utilizing our best-in-class cultivation and manufacturing across a greater distribution footprint and enabling us to connect with an increasing number of consumers and patients with our industry-leading brands and diversified product offerings.  Looking forward, we are planning to execute on the significant strategic and financial opportunities provided by the addition of SweetWater and, upon the closing of the Tilray business combination, including our over $100 million anticipated pre-tax synergies, to generate significant value for our stakeholders.”

Key Operating Highlights – Second Quarter Fiscal 2021

  • Record gross revenue for adult-use cannabis of $72.1 million in the second quarter, an increase of 149% from prior year quarter, representing the seventh consecutive quarter of growth.
  • Net cannabis revenue of $67.9 million in the second quarter, an increase of 99% from prior year quarter and an increase of 7% from prior quarter.
  • Net revenue of $160.5 million in the second quarter, an increase of 33% from prior year quarter and an increase of 10% from prior quarter.
  • Cash cost to produce dried cannabis per gram1 of $0.79 in the second quarter, a decrease of 9% from the prior quarter, which represents the fifth consecutive quarter of decreasing cost.
  • Recorded seventh consecutive quarter with positive adjusted EBITDA1 and positive adjusted EBITDA from cannabis business1.
  • Adjusted EBITDA from cannabis business1 of $12.9 million in the second quarter, an increase of 24% from the prior quarter.
  • Adjusted EBITDA1 of $12.6 million in the second quarter, an increase of 26% from the prior quarter.
  • Ended second quarter with a strong balance sheet and liquidity, including $320.0 million of proforma cash1 to fund planned Canadian and international growth.
  • Free cash flow1 improved $70 million during the second quarter predominantly as a result of increased cash provided by operating activities, as the Company better managed its working capital.
  • Completed first EU-GMP shipment of dried cannabis and cannabis oil to Germany.
  • Received import permit for first EU-GMP shipment of cannabis oil for sale and distribution in Malta.
  • Completed first shipment of medical cannabis to Canndoc for distribution in Israel.
  • Executed supply agreement with ODI Pharma AB, expanding Aphria’s international presence into Poland.
  • Completed the accretive, strategic acquisition of SW Brewing Company, LLC, further diversifying the Aphria’s product offering, broadening its consumer reach, and enhancing loyalty with consumers.
  • Expanded 510 vape offerings across Aphria’s award-winning adult-use brand portfolio.

Subsequent Events

  • Reached a definitive agreement to combine with Tilray, Inc. to create the world’s largest global cannabis company based on proforma revenue.
  • Closed a USD $120 million financing with BMO, providing a USD $20 million revolving facility and a USD $100 million term debt facility.
  • Broken Coast expanded its premium cannabis offering with the introduction of a newly developed strain “Pipe Dream.”
  • Received a total of six awards, the most awards given to one licensed producer, including four adult-use brands being recognized by the 2020 kind Awards.

Key Financial Highlights (In thousands of Canadian dollars)

Three months ended

Three months ended 

November 30, 2020

November 30, 2019

Net revenue

$160,532

$120,600

Gross profit

$39,492

$39,589

Adjusted cannabis gross profit 1

$31,167

$19,079

Adjusted cannabis gross margin 1

45.9%

56.6%

Adjusted beverage alcohol gross profit 1

$533

N/A

Adjusted beverage alcohol gross margin 1

60.5%

N/A

Adjusted distribution gross profit 1

$12,053

$10,959

Adjusted distribution gross margin 1

13.1%

12.7%

Net income (loss)

($120,598)

($7,929)

Adjusted net income (loss) 1

$3,219

($48,753)

Adjusted EBITDA 1

$12,572

$1,903

Q2-2021

Q1-2021

Distribution revenue

$91,740

$82,198

Net cannabis revenue

$67,911

$63,491

Net beverage alcohol revenue

$881

$0

Net revenue

$160,532

$145,689

Kilograms (or kilogram equivalents) sold 1

26,730

20,882

Cash cost to produce dried cannabis / gram1

$0.79

$0.87

“All-in” cost of goods sold / gram1

$1.30

$1.41

Adjusted EBITDA from cannabis business 1

$12,887

$10,399

Adjusted EBITDA from businesses under development 1

($3,199)

($2,820)

Adjusted EBITDA from beverage alcohol business 1

$299

$0

Adjusted EBITDA from distribution business 1

$2,585

$2,427

Cash and cash equivalents & marketable securities

$187,997

$400,019

Proforma cash 1

$319,997

$400,019

Working capital

$399,161

$725,512

Capital and intangible asset expenditures – wholly-owned subsidiaries 

$16,935

$15,808

Capital and intangible asset expenditures -majority-owned subsidiaries1 

$2,791

$1,496

  Source: Aphria Inc. November 30, 2020 MD&A11

___________________________

1 In this press release, reference is made to proforma cash, adjusted cannabis gross profit, adjusted cannabis gross margin, adjusted beverage alcohol gross profit, adjusted beverage alcohol gross margin, adjusted distribution gross profit, adjusted distribution gross margin, adjusted net income (loss), adjusted EBITDA, adjusted EBITDA from cannabis business, adjusted EBITDA from distribution business, adjusted EBITDA from businesses under development, adjusted EBITDA from beverage alcohol business, free cash flow, gram equivalents, cash costs to produce dried cannabis per gram, “all-in” cost of sales of dried cannabis per gram, capital and intangible asset expenditures – wholly-owned subsidiaries, and capital and intangible asset expenditures – majority-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 as a result are unlikely to be comparable to similar measures presented by other companies. These measures are provided as information complementary 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 Management’s Discussion and Analysis for the three months ended November 30, 2020, filed on SEDAR and EDGAR.

Net revenue for the three months ended November 30, 2020 was $160.5 million, an increase of 33% from $120.6 million in the same period last year. Second quarter fiscal year 2021 net revenue increased 10% when compared to the prior quarter net revenue of $145.7 million, as a result of an increase in distribution revenue at CC Pharma in Germany and an increase in net cannabis revenue as well as five days of contribution from net beverage alcohol revenue from the acquisition of SweetWater.  The increase in distribution revenue is a result of a return to normalized levels from the prior quarter.

The average retail selling price of medical cannabis, before excise tax, decreased to $6.96 per gram in the quarter, compared to $7.38 in the prior quarter. The decline is a result of specific pricing programs offered to assist patients in need who have been negatively impacted by the COVID-19 pandemic, along with other promotional programs.

The average selling price of adult-use cannabis, before excise tax, increased to $4.29 per gram in the quarter, compared to $4.15 per gram in the prior quarter, primarily related to sales mix.

Adjusted cannabis gross profit1 for the second quarter was $31.2 million, with an adjusted cannabis gross margin1 of 45.9%, compared to $31.5 million and 49.7% in the prior quarter. The decrease in adjusted cannabis gross profit1 and adjusted cannabis gross margin1 was primarily due to supply and demand and inventory that was liquidated below cost. During the quarter, the Company liquidated older inventory below cost resulting in a gross loss of approximately $1.5 million and the Company incurred under-absorbed overhead of approximately $1.0 million as a result of the Company’s planned reduction in operating capacity.

Adjusted distribution gross profit1 for the second quarter was $12.0 million, with an adjusted distribution gross margin1 of 13.1%, compared to $11.8 million and 14.4% in the prior quarter. The increase in adjusted distribution gross profit1 was a result of an increase in distribution revenue at CC Pharma in Germany. The decrease in the gross margin was a function of product sales mix at CC Pharma in the quarter.

Operating expenses in the quarter increased to $82.7 million from $54.5 million in the prior quarter and increased from $49.2 million in the prior year. The increase from the prior quarter was primarily due to transaction costs of $22.6 million associated with the acquisition of SweetWater during the quarter and increased share-based compensation largely driven by the increase in the Company’s share price. The increase from the prior year was largely consistent with the changes from the prior quarter.

Net loss for the second quarter of fiscal year 2021 was $120.6 million, or a loss of $0.42 per share, compared to net loss of $5.1 million, or a loss of $0.02 per share in the prior quarter, and a net loss of $7.9 million, or a loss of $0.03 per share for the same period last year. On an adjusted basis excluding the impacts of the items noted in the reconciliation table below, the Company recorded net income for the second quarter of fiscal year 2021 of $3.2 million, or earnings of $0.01 per share.

Adjusted EBITDA1 increased $2.6 million to $12.6 million for the second quarter compared to $10.0 million in the prior quarter. Adjusted EBITDA from cannabis business1 for the second quarter was $12.9 million compared to $10.4 million in the prior quarter. The adjusted EBITDA loss from businesses under development1 for the second quarter was $3.2 million compared to a loss of $2.8 million in the prior quarter. Adjusted EBITDA from the beverage alcohol business1 was $0.3 million based on a five-day contribution in the second quarter of fiscal 2021. Adjusted EBITDA from distribution business1 for the second quarter was $2.6 million, compared to $2.4 million in the prior quarter.

___________________

2 Adjusted loss per share calculated based on the weighted average number of common shares – basic as disclosed in the Company’s financial statements.

For the three months
ended November 30,

For the six months ended
November 30,

2020

2019

2020

2019

Net income (loss)

$  (120,598)

$  (7,929)

$  (125,693)

$  8,512

Unrealized loss (gain) on convertible debentures

87,646

(49,078)

87,225

(63,285)

Share-based compensation

13,595

7,563

17,856

12,519

Transaction costs

22,576

691

25,624

1,426

Adjusted net income (loss)

$  3,219

$  (48,753)

$  5,012

$  (40,828)

Adjusted income (loss) per share – basic2

$  0.01

$  (0.19)

$  0.02

$  (0.16)

The Company ended the second quarter with a strong balance sheet, including $320.0 million of proforma cash1. Further, the Company’s efforts to improve its free cash flow1 were successful in the quarter, as the Company moved closer to its target of generating positive free cash flow1.  During the quarter, the Company improved its free cash flow1 by more than $70 million.

 Q2 – 2021 

 Q1 – 2021 

Cash provided by (used in) operating activities:

$  3,404

$  (69,337)

Investment in capital and intangible assets

(19,726)

(17,304)

Free cash flow

$  (16,322)

$  (86,641)

Conference Call

Aphria will host a conference call to discuss these results today at 9:00 am Eastern Time. To listen to the live call, dial (888) 231-8191 from Canada and the U.S. or (647) 427-7450 from International locations and use the passcode 8084651. A telephone replay will be available approximately two hours after the call concludes through February 14, 2021. To access the recording dial (855) 859-2056 and use the passcode 8084651.

There will also be a simultaneous, live webcast available on the Investors section of Aphria’s website at aphriainc.com. The webcast will be archived for 30 days.

Aphria-Tilray Transaction Update

Aphria and Tilray are committed to keeping shareholders of both companies up to date with developments and significant milestones.

If you have questions or need more information about the proposed transaction, please contact Aphria’s shareholder communications advisor and proxy solicitation agent, Laurel Hill Advisory Group, by telephone at (877) 452.7184 toll-free in Canada, (416) 304.0211 for international calls or by e-mail at assistance@laurelhill.com.

We Have A Good Thing Growing

About Aphria Inc.

Aphria Inc. is a leading global cannabis-lifestyle consumer packaged goods company with operations in CanadaUnited StatesEurope and Latin America, that is changing people’s lives for the better – one person at a time – by inspiring and empowering the worldwide community to live their very best life by providing them with products that meet the needs of their mind, body and soul and invoke a sense of wellbeing. Aphria’s mission is to be the trusted partner for its patients and consumers by providing them with a cultivated experience and health and wellbeing through high-quality, differentiated brands and innovative products. Headquartered in Leamington, Ontario, Aphria cultivates, processes, markets and sells medical and adult-use cannabis, cannabis-derived extracts and derivative cannabis products in Canada under the provisions of the Cannabis Act and globally pursuant to applicable international regulations. Aphria also manufactures, markets and sells alcoholic beverages in the United States.

For more information, visit: aphriainc.com

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: Certain information in this news release constitutes forward-looking information or forward-looking statements (together, “forward-looking statements”) under applicable securities laws and are expressly qualified by this cautionary statement. Any information or statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements, including, but not limited to, statements in this news release with regards to available cash resources, Canadian and international growth, Aphria’s market position, ability to generate consistent growth, net revenue and adjusted EBITDA, benefits of the acquisition of SweetWater, completion of the combination with Tilray and expected synergies from the combination. The Company uses words such as “forecast”, “future”, “should”, “could”, “enable”, “potential”, “contemplate”, “believe”, “anticipate”, “estimate”, “plan”, “expect”, “intend”, “may”, “project”, “will”, “would” and the negative of these terms or similar expressions to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Various assumptions were used in drawing the conclusions contained in the forward-looking statements throughout this news release. Forward-looking statements reflect management’s current beliefs with respect to future events and are based on information currently available to management including based on reasonable assumptions, estimates, internal and external analysis and opinions of management considering its experience, perception of trends, current conditions and expected developments as well as other factors that management believes to be relevant as at the date such statements are made. Forward-looking statements involve significant known and unknown risks and uncertainties. Many factors could cause actual results, performance or achievement to be materially different from any forward-looking statements. Factors that may cause such differences include, but are not limited to, risks associated with [assumptions and expectations described in the Company’s critical accounting policies and estimates; assumptions and expectations described in the Company’s critical accounting policies and estimates;  the adoption and impact of certain accounting pronouncements; the Company’s future financial and operating performance; the competitive and business strategies of the Company; the intention to grow the business, operations and potential activities of the Company; the Company’s ability to provide a return on investment; the Company’s ability to maintain a strong financial position and manage costs; the Company’s ability to maximize the utilization of its existing assets and investments; the Company’s ability to take a leadership position in the industry; the expected inventory and production capacity of the Company; the expected category growth of the Company’s products;  the anticipated increase in demand for bulk and saleable flower, and the related growth in the wholesale market; the expected variability of wholesale cannabis revenue; the market for the Company’s current and proposed products, including vape pens, as well as the Company’s ability to capture market share; the anticipated timing for the release of expected product offerings; the expected cost to produce a gram of dried cannabis; the expected cost to process cannabis oil; the development of affiliated brands, product diversification and future corporate development; expectations with respect to the Company’s product development, product offering and the sales mix thereof; the Company’s satisfaction of international demand for its products; the Company’s plans with respect to importation/exportation;  the Company’s ability to meet the demand for medical cannabis; the Company’s plans to establish strategic partnerships, including collaborations with academic institutions in Germany; whether the Company will have sufficient working capital and its ability to obtain financing required in order to develop its business and continue operations; the Company’s expected ongoing contractual relationships, and the terms thereof; the Company’s ability to comply with its financial covenants in the future; the applicable laws, regulations, licensing and any amendments thereof related to the cultivation, production and sale of cannabis product in the Canadian and international markets; the grant, renewal and impact of any licence or supplemental licence to conduct activities with cannabis or any amendments thereof; the Company’s purpose, mission, vision and values; expectations with respect to crop rotation and harvest, the anticipated future gross margins of the Company and the potential for significant growths or losses; the potential for the Company to record future impairment losses; the performance of the Company’s business and operations; the Company’s ability to capitalize on the US market; future expenditures, strategic investments and capital activities; the anticipated timing for the first harvest from the Company’s German cultivation facility and the expected capacity of such facility;  current and future legal actions, and the Company’s ability to cover any costs or judgements arising from these actions either through insurance or otherwise; Aphria’s and Tilray’s strategic business combination and the expected terms, timing and closing of the Arrangement including, receipt of required regulatory approvals, shareholder approvals, court approvals and satisfaction of other closing customary conditions; the expected financial and strategic benefits of the Arrangement; estimates of pro–forma financial information of the Combined Company, including in respect of expected revenues and production of cannabis; expected synergies, including pre–tax synergies, savings and efficiencies from the business combination, including statements in respect of operational efficiencies expected to be generated as a result of the Arrangement in the amount of more than C$100 million of pre–tax annual cost synergies; expectations regarding the Combined Company’s business strategies, including in the U.S., and ability to pursue growth opportunities; the expectation that the Combined Company will unlock significant shareholder value; and the expected financial and strategic benefits of the SweetWater acquisition to the Company and its shareholders. The impact of COVID-19 nationally and globally which could have a material adverse impact on Aphria’s business, operations and financial results, including disruptions in cultivation and processing, supply chains and sales channels, as well as a deterioration of general economic conditions including national and/or global recessions and the response of governments to the COVID-19 pandemic in respect of the operation of retail stores; general economic conditions; adverse industry events and future steps to be taken in response to COVID-19; and the impacts of Brexit on the Company’s German business. Readers are cautioned that the foregoing list is not exhaustive and should consider the other factors discussed under the heading “Risk Factors” in Aphria’s most recent Annual Information Form and under the heading “Industry Trends and Risks” in Aphria’s Management’s Discussion and Analysis for the three months ended November 30, 2020, each available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated.

The forward-looking statements included in this news release are made as of the date of this news release and the Company does not undertake an obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless required by applicable securities laws. Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release.

The schedule below is an excerpt of Aphria Inc.’s financial statements prepared on a basis consistent with IFRS for the three months ended on November 30, 2020 and filed on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. This schedule does not contain all of the information in Aphria Inc.’s financial statements that is important to you. You should read the financial statements and Management’s Discussion and Analysis for the three months ended November 30, 2020 carefully to obtain a comprehensive understanding of Aphria Inc.’s financial statements and notes thereto under IFRS and related information.

Aphria Inc.
Condensed Interim Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)

(Unaudited – in thousands of Canadian dollars, except share and per share amounts)

For the three months ended
November 30,

For the six months ended
November 30,

2020

2019

2020

2019

Net revenue

160,532

120,600

306,221

246,712

Cost of goods sold

116,779

90,112

219,136

188,670

Gross profit before fair value adjustments

43,753

30,488

87,085

58,042

Fair value adjustment on sale of inventory

30,353

12,391

57,556

19,677

Fair value adjustment on growth of biological assets

(26,092)

(21,492)

(85,242)

(46,645)

Gross profit

39,492

39,589

114,771

85,010

Operating expenses:

General and administrative

27,791

22,076

56,144

44,381

Share-based compensation

13,595

7,563

17,856

12,519

Selling

7,538

5,662

14,751

7,642

Amortization

5,647

5,896

11,056

10,904

Marketing and promotion

5,273

6,592

11,380

12,426

Research and development

279

672

428

1,282

Transaction costs

22,576

691

25,624

1,426

82,699

49,152

137,239

90,580

Operating loss

(43,207)

(9,563)

(22,468)

(5,570)

Finance income (expense), net

(6,074)

(5,006)

(13,277)

(10,263)

Non-operating income (expense), net

(89,796)

4,568

(107,119)

24,871

(Loss) income before income taxes

(139,077)

(10,001)

(142,864)

9,038

Income taxes (recovery)

(18,479)

(2,072)

(17,171)

526

Net (loss) income

(120,598)

(7,929)

(125,693)

8,512

Other comprehensive (loss) income

Other comprehensive (loss) income

(1,418)

(310)

1,058

(1,996)

Comprehensive (loss) income

$(122,016)

$(8,239)

$(124,635)

$6,516

Total comprehensive income (loss) attributable to:

Shareholders of Aphria Inc.

(135,224)

(7,876)

(153,466)

7,050

Non-controlling interests

13,208

(363)

28,831

(534)

$(122,016)

$(8,239)

$(124,635)

$6,516

Weighted average number of common shares – basic

290,511,461

251,833,217

288,995,810

251,468,984

Weighted average number of common shares – diluted

290,511,461

251,833,217

288,995,810

252,427,777

(Loss) income per share – basic

$(0.42)

$(0.03)

$(0.43)

$0.03

(Loss) income per share – diluted

$(0.42)

$(0.03)

$(0.43)

$0.03


Aphria Inc.
Condensed Interim Consolidated Statements of Financial Position

(Unaudited – in thousands of Canadian dollars)

November 30,
2020

May 31,
2020

Assets

Current assets

Cash and cash equivalents

$187,997

$497,222

Accounts receivable

96,177

55,796

Prepaids and other current assets

48,162

42,983

Inventory

321,484

264,321

Biological assets

28,952

28,341

Current portion of convertible notes receivable

9,371

14,626

692,143

903,289

Capital assets

655,114

587,163

Intangible assets

686,440

363,037

Promissory notes receivable

3,000

Long-term investments

21,815

27,016

Goodwill

752,289

617,934

$2,810,801

$2,498,439

Liabilities

Current liabilities

Bank indebtedness

$5,111

$537

Accounts payable and accrued liabilities

254,318

152,750

Income taxes payable

16,576

6,410

Deferred revenue

902

Current portion of lease liabilities

1,767

1,315

Current portion of long-term debt

15,210

8,467

292,982

170,381

Long-term liabilities

Lease liabilities

44,896

5,828

Long-term debt

122,533

129,637

Convertible debentures

358,008

270,783

Deferred tax liability

45,391

83,468

863,810

660,097

Shareholders’ equity

Share capital

2,078,343

1,846,938

Warrants

360

360

Share-based payment reserve

29,600

27,721

Accumulated other comprehensive loss

(211)

(1,269)

Deficit

(215,739)

(61,215)

1,892,353

1,812,535

Non-controlling interests

54,638

25,807

1,946,991

1,838,342

$2,810,801

$2,498,439

Adjusted EBITDA is a non-IFRS financial measure that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. The Company calculates adjusted EBITDA as net income (loss), plus (minus) income taxes (recovery), plus (minus) finance (income) expense, net, plus (minus) non-operating (income) loss, net, plus amortization3, plus share-based compensation, plus (minus) non-cash fair value adjustments on sale of inventory and on growth of biological assets, plus impairment, plus transaction costs and certain one-time non-operating expenses, as determined by management, all as follows:

For the three months
ended November 30,

For the six months ended
November 30,

2020

2019

2020

2019

Net income (loss)

$  (120,598)

$  (7,929)

$  (125,693)

$  8,512

Income taxes 

(18,479)

(2,072)

(17,171)

526

Finance expense, net

6,074

5,006

13,277

10,263

Non-operating (income) loss, net

89,796

(4,568)

107,119

(24,871)

Amortization3

15,347

12,313

29,252

21,531

Share-based compensation

13,595

7,563

17,856

12,519

Fair value adjustment on sale of inventory

30,353

12,391

57,556

19,677

Fair value adjustment on growth of biological assets

(26,092)

(21,492)

(85,242)

(46,645)

Transaction costs

22,576

691

25,624

1,426

 Adjusted EBITDA

$  12,572

$  1,903

$  22,578

$  2,938

_______________

3

As disclosed on the Condensed Interim Consolidated Statements of Cash Flows

SOURCE Aphria Inc.

Related Links

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Worksport Terravis Solar System On Electric Pickup Truck

Europe has overtaken China as the world’s biggest EV market. Encouraged by subsidies and offerings, consumers bought EVs at a record pace last year, nearly doubling the continent’s share of global new electric car sales to 43%. But this success is largely owed to government support programs, some of which will expire this year which is why analysts warn the momentum could be reversed if and when that support is withdrawn. Meanwhile, the U.S. is going full speed ahead and unlike Europe, the US market is not as sensitive to government and company discounts.

The US is “waking up”

Around 65 new EV models launched in Europe last year which is twice as many as in China, with another 99 scheduled to hit the market this year. North America saw 15 launches last year, but 64 are planned for this year. What happened with Europe is that manufacturers had the right products to offer such as Volkswagen AG (OTC: VWAGY), Europe’s biggest auto maker, with its ID.3 and ID.4 models. But, the US is well on its way to catch up as legacy automakers are set to being rolling out electric versions of their iconic models. General Motors (NYSE: GM) went as far as making a Super Bowl ad starring Will Ferrell, who called on American consumers to buy EVs and crush Norway that ended up as the world’s biggest EV market per capita last year.

Legacy automakers are catching up

GM’s EVs are starting to take shape with the new lower-priced Chevy Bolts, the first in its lineup of ‘affordable’ EVs. Ford Motor (NYSE: F) vowed to sell only EVs in Europe and the UK by 2030, making it the largest automaker to commit to all-electric sales on the continent by that timeframe with its first Mustang Mach-E arriving hitting dealerships. Although this vehicle needs to convince Wall Street that Ford is headed in the right direction, Ford’s most eagerly anticipated EV, the electric F-150 is a year away.

Electric pickups are coming

Until recently, the EV revolution was limited to small vehicles, with the most popular vehicles in the US, pickups and SUVs, absent from the offerings. But that is about to change this year as advances in battery technology made it more affordable to insert battery technology into heavier vehicles with many pickups due to hit the market over the next 12 to 24 months, including new entrants, Rivian R1T, Atlis XT pickup and Hercules Alpha, along with revived Hammer for GM not to miss any action.

Worksport expands capacity

Atlis Motor Vehicles and Hercules Electric vehicles partnered with innovative truck tonneau cover manufacturer Worksport to configure its ground-breaking TerraVis system, the world’s first solar charging and power storage system for pickups, into its eagerly anticipated models. This revolutionary technology helped Worksport receive its first trademark registration in China in February.

Expansion

Worksport LTD (OTC:WKSP) announced this morning its strategic manufacturing expansion. The company is in final phases of discussions with a few very-high-value strategic partners, Tier-1 and Tier-2 OEM manufacturing power houses in Canada to expand its manufacturing into North American state-of-the-art facilities with 20,000 to 50,000 square feet of operating space to meet its recent U.S.-based Private Label customer growth.

New ecosystems

These discussions involve logistics for the best and most effective ways to support the company’s growth and ensure scalability in Worksport’s manufacturing processes. The company tapped into both the pickup market as well as the consumer market by extending its solar fusion line with mobile TerraVis COR™ system that can be used independently and recharged via solar or A/C power. The expansion will not only support Worksport’s expanding and maturing footprint, it will give the company control over capital expenses, greatly reducing risks of overextending its financials during periods of intense demand while building its major-player Automotive, Freight & Transport, Marine, and Rail ecosystems, at helm of its CEO Steven Rossi. The company is going all in to exceed customer expectations and all of its efforts directly enhance and benefit the EV market.

Takeaway

While most industry leaders welcome government efforts to fuel new technology markets such as EVs, auto makers worry that subsidies will only have a short-term impact. A global adoption without broader structural changes won’t create a self-sustaining market. What governments should focus on is developing the supporting infrastructure such as charging stations.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaPRs

Worksport Investing in Increased Manufacturing Capacity to meet Anticipated Demand Surge

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TORONTO – March 2nd, 2021 — Worksport Ltd (OTC: WKSP) (or the “Company”) is updating its shareholders regarding its strategic manufacturing investments. The company is in final phases of discussions with a few very-high-value strategic partners – Tier-1 and Tier-2 OEM manufacturing power houses in Canada – to expand its manufacturing into North American state-of-the-art facilities with 20,000 – 50,000 sq. ft. of operating space. These discussions involve logistics for the best & most effective ways to support the growth of Worksport.

One of the most important operational facets is ensuring scalability in Worksport’s manufacturing processes.  The chosen factory will be able to support Worksport’s forthcoming rapid operational acceleration which is vital as the Company grows with an expanding and maturing footprint.  “This also means that the Company will have more control over capital expenses, greatly reducing risks of overextending its financials during periods of intense demand as we forge ahead in major-player Automotive, Freight & Transport, Marine, and Rail ecosystems,” said Worksport CEO Steven Rossi.  And elaborating on the facility requirements, Mr. Rossi adds, “Worksport is only considering factory candidates that offer the highest quality infrastructure, conducive for hosting Company-specific systems so as to avoid risks of any major inadequacies.”

With its recent U.S.-based Private Label customer growth, these manufacturing investments are sure to help Worksport exceed those customer expectations relating to quality, efficacy, and reliability of work, all conducive to overall customer satisfaction.

It is also worth noting that as the Company finalizes plans to set the playing field for a powerful manufacturing presence in North America, their optimized Design-for-Manufacturing (DFM) processes will provide capabilities to utilize Just-in-Time (JIT) manufacturing methods for producing products and fulfilling orders on-demand, while also ensuring the highest level of quality assurance.

To stay up-to-date on all the latest Worksport news… investors, shareholders, and supporters are encouraged to follow the company’s social media accounts on Twitter, Facebook, LinkedIn, and Instagram, as well as sign up for the company’s newsletters at www.worksport.com and www.goterravis.com.  Worksport will continue to update investors, shareholders, and supporters to maintain the highest level of disclosure and information dissemination as Worksport continues to grow and develop at a very rapid pace.

About Worksport Ltd.

Worksport Ltd. (currently OTCQB: WKSP) develops and manufactures high quality, modular, attractively priced tonneau covers and solar-powered systems for light-duty trucks such as the Sierra, Silverado, Canyon, RAM, Ford F-Series, et al. and consumer adventures & emergency/ disaster-recovery purposes, where portable energy is a necessity.  The modular, redefining Worksport TerraVis™ tonneau cover system is being mindfully designed for the jobsite contractor and off-road, light-duty trucker – for work and play – to sustainably supply extra energy for those additional miles.  Its allied TerraVis COR™ mobile energy storage system (ESS), expected to launch by end of 2021, will be another redefining product targeted for vacationers, second-home owners, and campers.  Plans are also being constructed to address the dire adoption & scaling needs of the EV markets with grid micro-charging stations to provide convenience and efficiency in recharging to smaller form-factor EVs.  For more information, please visit www.worksport.com and www.goterravis.com.

 

Connect with Worksport:

LinkedIn

Facebook

Twitter

Instagram

For further information please contact:

Mr. Steven Rossi
CEO & Director

LinkedIn

Twitter
Worksport Ltd

T: 1-888-554-8789
E: srossi@worksport.com

 

Forward-Looking Statements

This document may contain forward-looking statements, relating to Worksport™ operations or to the environment in which it operates, which are based on Worksport™ operations, estimates, forecasts and projections. These statements are not guarantees of future Company performance and may involve risks and uncertainties that are difficult to predict, and/or are beyond Worksport’s control. A number of important factors could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. Consequently, readers should not place any undue reliance on such forward-looking statements. Worksport™ disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. No Stock Exchange or Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.

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BenzingaEditorial

This Week’s Stars Are Zoom, Target and Costco

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Zoom Video Communications (NASDAQ: ZM) will open the week on Monday after market close whereas big box retailers highlight the week’s other big releases, led by Target Inc. (NYSE: TGT) on Tuesday and Costco Wholesale Corp. (NYSE: COST) on Thursday.

Zoom Video Communications

According to Financial Times, researchers at Stanford University have confirmed what millions of remote workers already knew, that “Zoom fatigue” causes greater stress than meeting in real life because of the “non-verbal overload” of endless video calls. Not to mention that users are seeing reflections of themselves at a frequency and duration that hasn’t been seen before in the history of media and the history of people. Although some problems could be solved with trivial changes to its user interface, such as automatically hiding the “selfie” window, the bigger problem is On Zoom, behavior ordinarily reserved for close relationships such as faces seen close up has suddenly become the way we interact with casual acquaintances and even strangers. This new way of communication takes a toll on our mind and that could eventually hamper Zoom’s success with the stocking already having lost its luster due to vaccine developments.

Novavax (NASDAQ: NVAX) is preparing to launch its COVID-19 vaccine after 33 years of failed attempts and facing delisting from the Nasdaq as it couldn’t deliver a single approved shot. We will get a new chapter in a fairytale-like story of a little company that was on the verge of potentially closing getting the chance to play with the big boys in the race for the Covid vaccine. As soon as its vaccine gets approved, it is ready to produce 150m doses a month.

Nio (NYSE: NIO) will pop the hood after market close. Earlier it stated that Q4 deliveries were at a record of 17,353 vehicles which is an increase of 111% YoY and over the upward end of its guidance. But, when it comes to EVs, profitability has frequently taken a back seat and despite the encouraging deliveries, the company has been in the red.

Tuesday

Kohl’s (NYSE: KSS) and Target are due to report before market open. Last week, a group of activist investors pressured the department store to address stagnant sales and operating margins so it will be interesting to see how the story continues as critics find the company isn’t moving fast enough to turn itself around. On the other end, Wall Street expects Target to post a profit of $2.54 per-share on $27.4 billion in revenue which would be an impressive 50% profit increase. Some of its biggest peers have already reported fourth-quarter earnings but investors have big expectations for its holiday quarter. We already know Target had a good season as it revealed that sales grew 17% during the holidays which on its own is enough to outpace Walmart (NYSE:WMT), which just reported a 9% holiday quarter boost. But, this is a slight slowdown from its third quarter’s 21% growth so we’ll learn whether Target continued to win market share in each of its core selling categories. Nordstrom (NYSE: JWN) and Box Inc. (NYSE: BOX) will board the reporting train after market close.

Wednesday

Dollar Tree (NASDAQ: DLTR) will report before market open with Okta (NASDAQ: OKTA), Snowflake (NYSE SNOW) known for its ‘too hot to handle IPO’, Vroom Inc (NASDAQ: VRM), Splunk (NASDAQ: SPLK) will reveal their earnings after market close.

Thursday

Kroger (NYSE: KR) will report before market open with Opendoor Technologies (NASDAQ: OPEN), Broadcom (NASDAQ: AVGO), SmileDirectClub (NASDAQ: SDC), Costco and The Gap (NYSE: GPS) closing the earnings week after market close.

This week will be full of retail that was dramatically changed by the pandemic. We will also get a better idea if Zoom can maintain its success beyond the pandemic as despite its many benefits, digital communication didn’t measure up to in-person socializing.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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