Aurora Cannabis CEO Terry Booth Resigns *secret conference call LIVE* – RICH TV LIVE – FEBRUARY 6, 2020 – Aurora Cannabis Inc. late Thursday said that Chief Executive Terry Booth is retiring amid “sweeping changes” for the Canadian licensed producer, the latest pot company to cut costs amid a cash crunch in the sector.
Aurora outlined a “business transformation plan” in a lengthy statement that detailed job cuts and large cuts in the valuation of some assets that the company expects to recognize when it reports fiscal second-quarter 2020 results in February. Aurora shares ACB, -14.05% ACB, -5.16% fell more than 16% in the extended session Thursday, after being halted for news Thursday afternoon while down 5.6% at C$2.67, or $2.
The company said it has eliminated about 500 full-time staff positions, or roughly 17% to 18% of its workforce — Aurora said in September it had 2,779 employees as of the end of June 2019, and had grown to 3,000 workers into the fall. Aurora plans to record asset-impairment charges of C$190 million to C$225 million and write-downs of C$740 million to C$775 million, and said it would bring capital expenditures under C$100 million for fiscal 2020.
Aurora also detailed preliminary second-quarter fiscal 2020 financial results, saying it expects cannabis revenues between C$62 million and C$66 million for the quarter, net of excise taxes. That would be a sequential decline from net cannabis revenue of C$70.8 million; analysts on average were expecting total net revenue of C$78.8 million, according to FactSet.
Regarding the charges and write-downs, Aurora said that thanks to slower growth for pot companies and “current cannabis market conditions” it reviewed “all business operations and concluded that certain assets and goodwill values as at Dec. 31, 2019 exceed current fair-market valuations.”
“Following these noncash charges, Aurora expects to remain compliant with its revised total debt-to-equity covenant going forward,” it said.
Aurora Chief Financial Officer Glen Ibbott said in the statement that the assets impaired are primarily in South America and Denmark, and the company’s “core Canadian cannabis assets are not impacted by these noncash asset impairment charges.”
The company said it would focus on “core areas” such as the Canadian consumer market, the Canadian medical marijuana market, established international medical markets, and U.S. market initiatives. That statement and the write-downs suggest that Aurora will largely give up on international ambitions beyond the U.S. The company has established operations in Europe and South America.
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