Aurora Cannabis (ACB) 13 May 222022 Q3 Earnings call transcript

Greetings, and welcome to the Aurora Cannabis Inc Third Quarter 2022 Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ananth Krishnan, Vice President of Corporate Development and Investor Relations. sir. ahead, go Please

third issued and With you Miguel me for bases. Ibbott. discussion closed, release, via CFO, management of fiscal analysis Denise, announcing SEDAR us website and are Martin; for this Glen Aurora market the afternoon. available today After and our and the news XXXX. we financial you, release all appreciate joining data accompanying and financial quarter results a IR EDGAR Thank statements, are and The on CEO, our

you can or anticipated IR periodic are risks our today's detailed statements. to statements and that forward-looking addition, from could performance. The business statements. matters reminded materially find In other factors forward-looking in These deck results a and subject may financial Actual accessed in on results and website. may that filings differ actual and Form via in these supplemental uncertainties our SEDAR conference discussed affect also constitute are information be EDGAR. call registration related documents could Listeners to Information those are that Annual future certain our risk

analysts. Following conduct a and we prepared Glen, will by for session remarks question-and-answer Miguel and

queue. question the to and will I we Please to to However, to go the ask Miguel. limit over yourselves With call then you one that, return turn ahead.

control of and Thank by profitable you, can Ananth. on of we first the fiscal delivering volatility, market inflation, intent EBITDA XXXX. political environment are controlling adjusted defined record-setting In rate reaching we and an our upheaval, run on what half by a target

this than ago. of revenue working and in defensible and being LP tell you position over the this terms we of economic to in were both margins number today's of exceed our cannabis XX%. canvas Europe desirable with environment. to is we medical to confidence The which in I'm in our months, and our foundation business is that grow better world, quarter XX These very volatile is the And Canadian other global especially business, plan one are fact, Australia pleased continues characteristics the parts stable In the a are highly last in goal addition to medical hit that, quarter. in

reason we The pleased end higher savings our an XXXX. opportunities. fiscal to that for confidence for of said, $XX a savings million $XX of timeframe, million the is are Today, within cost that of achieved second targeted our identified Recall identified are to have million additional million quarter, we $XX last half annually, first million and million by have from savings to total $XXX $XX the we'd additional annually. announcing same we of we to savings of $XXX

cash our materially them our total cost impact plan we expect reduce Importantly, growth to but savings investments, won't needs.

unique licensing. that program. we high-quality long-term, partners and remains sheet, convertible Our of reason enabling which success innovation ATM of million challenging position in is about accretive million U.S. a of third and makes by genetics catalogs and to $XXX in remaining and balance to in our times. and OCO, strongest in early the of million capital-light, drive innovation continuous available largest repurchase of biosynthesis market. among growth opportunity strategic our business strength, licensing revenue in can $XXX has our opportunities, of currently the a one $XXX Fourth, for have value for IP represents the deliver science the We Aurora our cash, debt believe stream inclusive in OCO further approximately under industry the puts particularly and Aurora a

medical business. deeper on Let's dive our take a

not expect Israel was down QX, to last our from we this But recur large During year. because last up of to QX, did compared quarter. shipment international revenue XX%, medical quarter, to which

permits. predictability complexities, regulatory government especially such and you as timing As import markets know, of by approvals in developing affected be revenue, can of

products We in or France. the quarter's pool are countries. threefold EU, the to but there revenues cannabis the another X% currently are patients medical if all year-over-year, Poland, market Czech EU UK, And three shipment Republic, strong in are we in XXX,XXX million selling either the similar of $X.X as quarter. record Poland, top as reach estimate of in seven it adoption the countries, leader levels population, up with grew Malta, were In to Canada followed i.e. those around patient We Denmark expand today, and patients. last breaking could Germany,

position established In out the numbers increased QX, last share, a in revenues XX% UK, accompanied launch and a push. compared to marketing prescribe market expect year. continue, more patient a success the more XX% Polish with we flower the new cultivars has by Growth come in and QX driven leadership have by We an in evidence estimated rapid as cannabis. was our to as increase physicians

reimbursement we've is currently, barrier no not to is there seen growth, which erosion. pricing any While a

are to of We partners. calendar three already to completed And preparing products and selling all best In the two first import share. flower are top also market delivery XXXX. the we for have Germany, dry in QX and estimate launch number of our currently extracts had in we two

thanks grown to in new the has markets share market product Our innovation. steadily extract

Netherlands, half flower. largest due have million coalition's market. here of new and a of country's is shipments adult we we retail like as calendar of size improve moderated billion prescriber exclusive the in XXXX. While coffee shops. to Germany to roughly generating France, plans which expect with for Canada, in to holders legalize March we're in The we is $X patient market we partner Netherlands given pilot date XX three adoption, early France, And medical to recall to and accessibility. of revenue and In is sales begin cannabis approximately the license Early citizens us supplier where rec remains X the the program XXXX. legally completed estimates cannabis the numbers dry the In are EU, growth patient the as produce have sell bullish, in the XX XX% slow

XXX% of vapes. revenues supply year-over-year, certified dry by we driven agreement our patients. products, rose our in Finally, MedRelief medical range flower with GMP and recently Australia, EU numbers released of record the offer Through including exclusive in patients Australia,

me Let that the story we believe on that several reiterate cannabis next medical center growth recreational. will years the and over international

testing cannabis sizable share currently schemes, given be position the expected is EU recreational only And have placing the X is our The governments for a to to protocols, science. billion regulatory attributes These expertise, market announced we pole for by While market a notably market several medical success. most EU grab Germany. XXXX. plans and for expect compliance

the to patient, of leading points advantage, attribute Turning expanded in now these mostly share only Canadian service Overall approach gains and to to direct-to-consumer premium our compared the innovation. not the class industry have medical QX best products flattened a to our was although revenue drives with XX%. margins. We we physician QX our market, a share competitive we market clinician along of and number offer XXX basis launch but

The the key This and infrastructure experience. XX% is made believe our other sales, the well QX. the we the up such directly Canadian that up XX% through patient from in requires insured and Our retain resources our and the domestic move in is stability patients bodes Germany infrastructure to and future. a for of is knowhow as significant key medical success market acquire, that to and the a applicable to truth UK, France. process And and same markets, lot of patients

excess challenges QX adult reflects rec, our including macro Regarding revenue inventory persistent older SKUs. Canadian pressure on and

scale medical launch to resources production and and As products on maximizing and From July we've longer the higher we this dynamics these cultivars include bevy benefit wrapped our hash but new a and program, from to facilities industry pre-rolls, brand infused new respect to focus meantime, These and plan have vape no breeding and makes margin flavors. cost categories. we low sense, navigate profitability and both further to leveraging rationalizing of our concentrates new through the before, first and XX we April our also said are offerings, entered consolidation. have channels. by In edibles unsustainable, with remains

and calendar cadence significant regular new innovations. full includes year a products, established have product XXXX innovation new Our a we of of number

charge like with will immediately want of Thrive Thrive. is our to which bottom has team This able and of would XXXX. premium widely Canadian our contribute by as recognized expect was Glen. with I our number with This to a profitable for line. recommended who flagship Canadian in that acquisition to known talented to winning thrive premium now to turn products award recent business, limited practices And recreational build call cultivation the which conclude Cannabis place transaction I brand that, resources drive the Company, its improvements management team, in one we the accretive most rec offerings. Finally, Greybeard been tenders will will bud over EBITDA business in brand

Thank Canadian $XXX among term quarter of take Good no off LPs. a we I'll At one balance highlights. sheets in everyone. you, and million Miguel. We with pride afternoon, key the few of start debt. strongest end had having cash

a million During QX, of including we principle debt at repurchase interest. another million a we $XXX.X May $XX.X total our accrued And in on million, on of convertible principle total accrued cost convertible interest. our repurchased debt early XXXX in $XXX in at $XX.X million cost including

We have still interest May, believe paid Also, million we This to the decision. prudent is remaining debt debt reduction defensive will save price. annual principal closed US$XXX we million. As cash, allocation capital about we cash three debt. of that in of and $XX for reduction even million $X.X $XX out, costs Thrive of almost maturity acquisition which mostly million early convertible up on years cash our is a though today,

to our access on including US$XXX.X programs. continue We remaining US$XXX.X have ATM still perspective, available direct, million under to shelf with a million

opportunities. purposes, As we other this and strategic available as before, consider M&A, need have don't operating value creation it for stated capital for we

working Our we Miguel And last cost on cash continue described, flow to $XX.X million targeted and $XX.X improve cash used of continues with period same to XXXX in capital the million operations QX in compared expect calendar in the improve. additional to year. to based reductions in flow that

We key is decline as of to by by healthy, and adjusted compared last we and gross revenue million year; provinces EBITDA to consumer competitive positive part The cannabis loss expenses our as pressures This that I'll in to to cadence to quarter milestone quarter, increased our net to and across Israel, differences, reduced cannabis further due from $XX.X net during are due as $XX.X lower also shortly, the to progressing business revenue premium partially SG&A closures as in last QX to strong our store mainly plan. the million shipments margins however, remain of with retail offerings. million. loss impacted change our transformation portfolio, because EBITDA quarter million of due was purely continued explain variable compared $X.X was revenue $X.X closer last quarter. our coupled versus quarter

our let slightly me medical businesses $XX.X address a revenue detail. of So core bit million each in from Canadian QX. in QX, down was more

those fall focus on population, the have we patients medical said what reimbursement previously, improve To into earlier, our us on should it. said Canadian purposefully two repositioned those insured to have our patient bottom-line. further build As which we without allow our groups, cost to and Miguel with business

year, is sequentially. $XX.X revenue and XX% reflected prior growth the medical international XX% the of million, decrease versus Our and

remember approximately million in will that I Now to Israel. net included sales $X.X revenue QX

growth XX% of sales, and the QX Poland, by important sequentially impact markets, Australia. in medical net including and revenue by Israeli the Excluding was Germany, driven international UK increased

component distinguishes the is first our in run of So profit in gross businesses our represented XX%, reaching Canada generated Medical us up total half gross This by slightly $XX.X about rate and of QX businesses and and a our XX% of Europe sales critical XXXX. segment performed prior in leading from of of generating QX us margin gross end as for stability well, the profit. the quarterly. the medical in revenue almost the and competitors, usual of XX% together, taken positive the million EBITDA our from fiscal a

which million, our of revenues XX% to reflected quarter. our represented Our profit. XX% about the decline QX compared Consumer gross cannabis consumer about XX% a $XX.X was revenue last of and QX

for pressures as as impacted improves premium It XX%, price COVID-related As cannabis special our we net mentioned continue and revenue. to this with were San fell, we was even exacerbated important shift important towards This expect to the the that closures points and our by see portfolio. consumer before, to margin move acquisition decline attributed January is portfolio data to March combined consumer first to margin is I path basis Thrive, margins shift gross the revenue accelerate. brands. primarily product in note time our that, for premium In than our Rafael EBITDA, our revenue greater our is store higher to sales history, positive in XXX across to of the

this of included prior includes off an R&D importance example only $X.X was QX. revenue costs million and profit at being $XXX,XXX. shift, the As in despite million gross down of $X SG&A this in quarter-over-quarter, period came QX, restructuring And $XX.X which accruals. in million in

was Excluding these costs, level years, in four XX.X adjusted which our was SG&A million, adult use almost prior lowest legalization.

certainly of SG&A efficiency already significant targeted our updated and as not savings. make is for our additional the are done expect While with controlled, part well we cost range progress to

as million million, we to an by the partially sales loss offset in together, this Israel, a was $X.X with So, loss pulling SG&A quarter lower and driven EBITDA last all level in the expense. primarily was $X.X generated $XX.X QX EBITDA adjusted decrease compared adjusted yes, in million in of XXXX change adjusted of of

strategy XXXX sold either to you of calendar the P&L these executed the over Now, to all production of necessary to And before savings with SG&A market related Canadian adult revised executed. savings on plan. We changes annualized of no facility next $XXX between of they the give Sky of of evenly for cash are down in premium our focus goods bit million to part away move $XXX to as end plan low inventory as all basis. the and have an margin more transformation I'll positively higher producing it on This and be for our or our occur the our rec of the color purposefully in of of impacts course, savings. keeping from reflected savings categories. SG&A. be is announcement split should the categories They following expect decision our a in the flow is million target quarters closure cost drawn changes, three margin to Edmonton Aurora Today's is business regarding cost in and our

segment EBITDA million. Resulting We and a $XXX.X number upward model impairments strategic to of one-time provide leaner And is strong was are non-cash more leverage operating expected changes, increase. recorded accounting down charges future the a completely Canadian $XX.X of and toward business working from as we agile transformation revenues specific charges charges in we written the QX. provision recorded Goodwill market inventory asset million. million, an in $XXX.X

QX there are of takeaways financial key So summing three up, from my review XXXX.

our sheet strong cash by working improving capital on healthy First, convertible a supported balance, cash reduced and levels, flow. balance remains debt

expected Canada more of sustainable and provide cannabis a profitability. impact noting critical do reflect to our or bottom-line competitors it's cannabis These are leaner advantage positions Second, for future cash internationally And and And range our competitive for in entire savings. that well generating profit are growth. generate their material Canadian medical businesses we a LP the from model have operating with flow for us to as to worked gross us and any than we've increase target worth businesses. cost and businesses finally, medical our hard positive

So, I'll your to now call the interest thanks for Aurora. Miguel. in turn back

Thanks, Glen.

me takeaways. Before Q&A, share let some final

of achieve fiscal positive of expect run a XXXX. the rate We adjusted by end the first half to EBITDA

it smart behind, possible high a internationally. in Europe, does domestically characteristics, It business our of our no continues particularly recession. war high both in environment in cannabis view, and be business and and better, defensible to Second, medical to margins, has invest one inflation

we correct is we market that market the complete, to for and rec added expect share will have Third, opportunity pricing. process when Canada and in

growth our value also science sheet Fourth, strategically, in M&A forward, is footprint rationalizing our rationally patience On portfolio. only our meantime plan M&A. we're us have the considerable opportunity part and we efficiencies. another but program already demonstrated position our in cost balance over fits innovation going driving and a accretive time. believe we is organic adds in great to focus are of create note, strategic for a and positions to not targets our that capitalized Our And strong and that evaluating acquisitions, and shareholder discipline vital priced. The continued seeking

goals, and we're track. squarely stated rest the time for appreciate on delivering notably our our in of We're So is on We for it And plan, business which interest open most operator energized the year. closing, turn your transformation I'll today. questions. lines over the now, the to

The will [Operator we we is time, go this At session. have sir. Instructions] ahead. question-and-answer question a Michael Sandler. from you, Thank conducting Lavery Piper first Please be

way. Aurora to it's Sky get the finally closed see surprise So, no all

the Could margins it? know deterioration you're incremental has selling a this savings sort a How on fiscal facility. EBITDA the of it the but I just it times a all portfolio that drivers the driven to the should bit last of the really several of to this of a see I it's the sales one capacity the while. of -- always are little one? touch it's maybe what flowed was that? we what year? really much think how in that, showpiece that little is for big related quarter the at of 'XX them lumpy, Is It it? majority? Is about think versus but how much to you several in Is fourth of moment, it there? understand by to And hitting savings through was starting how pieces? bit sequential some a quarter from And

Sure.

So line I'll points. let Glen a and sort modeling the me let point, go of some then into of kick off top on

particularly these idea that that You grow built in massive as and and of Canada, and I Europe. think and it ship could people that know, all aware flower, world, particularly you facilities many U.S. around Canada, aware, were the this built, including the cannabis, were really Eastern parts are Michael, in well with you're

was obviously So, come be. has not that to

very not we're to Europe. that that, significant in And in needs. Western well, as only mention employed not in been for right seeing it Canada, evolved but U.S. see what I aggressive sizing and facilities environment. the I here proactively automation, in the amount things also quickly consumers Aurora massive Secondly, this it very is of we're starting think the just very for seeing you're These into, discerning, of being we're for has would one Company purpose a built

So Aurora on capacity, what cost just fixed and just down could was didn't most find carrying Sky as means we that able recently, about to and flower to was your to cannabis, and it everything of sell that try to be XX% untenable, work. the announced, we we've across system type did locations,

think that make need to I order tough we an we sort the to decisions in indication that the So that overall of that everybody it's make should footprint. to be will continue have proper,

network, complicated Secondly, facilities you creates of such of a that sort when with cost the in over system. excess all it have a overall Canada, simplicity lot of

because so other of significant carrying And Aurora of Sky, simplification, costs as have a overall. of not to we've will benefits, but closure the facilities announced there's also that the the or impact just added which well,

him of our are the But about sheet, hit grab the those going the important Michael's proud you so, Glen, think part and you'll think I is savings of Glen, points. talk fast mention, you flow the Michael want Just quite quick to modeling really I terms are mean, I will to and in I timing? balance the of know, through? of thing quickly. see the question if And one do how you could sort how second all that we're and

Sure, Mike.

that much last of were tranche pretty by end we're the operational we that executing getting initial towards centralization. mainly driven the announced So, savings of year

instance, April just have for the And just moved are manufacturing back running east finally was Polaris shuttered and up on that been lines in so, now.

here. noise external Sorry,

quarter. impact timing in to on flows those, on positive starting So, lot a seeing should start the you come the that, of the through next cash

to savings. Miguel have of combination additional tranche about couple XX-XX is reductions tranche be reductions talked that cost The SG&A in expected of are cost of next that that quarters. about that savings executed over of additional of announced some we facilities both the Now, on SG&A shuttering

by them immediately. we'll mean, our end So, Sky Sky the of hitting see to summer. reduction, shut have And I plan current the down is

good flow be it think of Obviously, or cost savings. takes two following the I So, quarter of next quarters flow that. a as the couple terms cash telling to hits in side, production through will our of

little well. improvement So, as to September year, margin we quarter bit the the expect a through coming the towards of see last calendar the maybe in even quarter

So, than impact we it savings. other seen haven't the really Mike SG&A

coming. really our but seen financials stuff impact We yet the it's haven't

one point I I save cash other in would know, Sky you mean, quarter million will make example, Michael, savings. a $X for is, us closing

So, it's significant.

have you, Please go The question next we from Andrew sir. Thank is Carter from ahead. Stifel.

afternoon. Good

you the have So, by upgraded quarter. your I in just the and loss want to EBITDA $XX adjusted target $XX ask million was million

So four $XX million we to just multiply sure by $XX savings. end loss, cost to should be getting rate, Thank this of or that's make of think $XX that million tail not and, the squaring and including old Are EBITDA I correctly. savings. of million you. Thrive run the even I'm that got a you want you saying

do timing? Glen, staging to and think to I'll about talk about then the want the through walk how you

million actually is loss, bounds, Thanks. out of XX saying, guys. about I just XX XX just the I years. think was Not, that plus -- absolute an next really or that was not two over timing to annualized number

I'm following having your little a trouble there. question

to take expect down Our low basis to be on SG&A, just coming continue and are XX, through or it out more to over time the we they efficiencies improve margins a where centralization, of quarterly operation. to our at the expect we

depending XX So, of. that below cost going can without we our even down from at most deposit us that get of XX in two, way between reduction to it's the take to the the is you the on down need see now revenue taking But, SG&A as on roughly growth.

And and as and presumption, what the gross and EBITDA particularly profit would, add you pertains business the the adjusted of business only if you made steadiness piece is up to SG&A has sort drop a of I of think back you the math profess plus mentioned envelope, I some that, -- pieces flips mean, Andrew, think people of other rec should the there. it to not took savings. I think it I guess to. QX confidence want the I the on I'd why you're you, of to XX The don't I a that's I I in and adjusted EBITDA presume Glen bit don't the to have but think is, two target. would

[Operator Vivien question which ahead. we Instructions] Cowen. Please next The have, is Azer go from

This for for Victor Azer. Thank the taking on is actually questions. Vivien you

given Germany's competitive how by your and adult offer to So position market there on you the leverage look timing? you frame use in can current legalization, and health comments the ministers recent the and offer thoughts opportunity adult also color finance to Can accelerating you. some Thank you opportunity the medical and your there? use, approach

I'd happy to. Sure, be

of EU into these pieces whether it's or or Netherlands, production, with protocols, framework It's that and of the and thing think Germany, these of whether countries first they get they of all pick I terms the all and EU GMP in regulatory it's countries. any and with regulators, manufacturing So, start you it. the different similar a

And racks. the we're think I decision a inside them. in So, have that companies we'll which the made. pleased have in are and In medical. with that was one that on speed are line that we making clearly folks success, announcement bit folks that were were those the had Germany, involved The of

it it's rapid hard strategic for really is a will approach, quick doesn't pick this. that to everything we because So, sort to in hope change medical of doing But turnaround. apply you're your timing what

the you modeling. using products that's what cannabis so in little share X%, XX% nuance talked that percentage point in of upside. their to so on we're the we at multiply pleased gives will one-tenth can One, Germany a I XX regulators, us. allow approach, population Germany you buffer the you the number, think have say, conservative think and which now, potency label possible Most bit productive Canada, production But particularly conversation which you if places potency XX%. that well about is that a becoming you that population, so the provision times a for for very had as compliant a quite I'll And difficult Right well, deviation a it's deviation X.X. you the adult plenty Germany bode very and about and cases, thing most see for see world is X% I the about has we've is with side, think I are in many on sort while why only product, this In you very hard, they'll of little XX% of is popular. Balance Miguel, a to might the at a challenge have variation, gives only THC Germany.

goes it'll have of the line. think we one think we be them, So we're the that and leaders inside in rack Germany said When they and we'll subjective.

at there have go, effect eyes point a think the standpoint. do from are would regulatory them they a look as looking other to currently markets the a halo it's out on at on also of if We around it. And Germany that economy we lot largest that going

sir. is we next CIBC you, have John from Thank The question World Zamparo Markets. from

maybe as about especially you ask and the M&A capital to Does and It following in give they're that more constrained wanted more. drive the I though the more going that are any human to you're point? strategy and appetite in to this but for look keeping there appetite compress is be space acquisition. valuations accelerate seeing capital in have active M&A seems the to at past generally companies connected, and brands on mind acquisitions

question. great mean, it's John, Yes, I a

our been access that U.S. to of have with thoughtful approach. of which I the think And, we've areas around two one, really with activity. been going a FDA One points the there's is, M&A sort doing an to we're regulation really and is U.S., U.S. in everything world So, play record that the of the clear is on about, a sort

So, that. in really U.S. the about not on high valuations, think those smart been I we've around chasing

dynamic what about, seen Canada for is I you're their of mentioning of piece you credit nature business type and the and share Second not, know, market share, what does there. buying you do you market really around what make get with think, you're I making companies markets, a capital difference. go really the of point is And human positive renting and do approach. after? just is question this sort And significant this, to companies a the

we one different making was I sustainably and accretive, of functioning you thoughtful, and teams high think, was to on them others, put then my it a that are money. of you so, really know, great charge than finding know, are are rec that interested team, Thrive And our And in business. that in intent those are margin find focused teams.

Jeff, at do his team, in business, a the our our business. high going of amount significant run Canadian innovation CEO so, medical level rec but a I only, company, business that Uber, talent can international genetics, also wonderful they they're into our we And plug a And both bring rec not name business. and domestic to that now they'll of think that who's with

there. know, possibly ourselves affordable medical sense, if you the we strategic advantage without not to And a as things being make as sheet. Glen particularly, company cannabis but of flexibility key consider got there, tighter, of the mentioned, as being particularly any balance the best international get be So, think medical assets. and for is I really, out get, one And capital lot And cannabis boastful, more we've the best, would a more company, too access we on things company. around

interest know, to And of type those so are us. you unique things

sir. we next you, Blonde from Thank Andrew from have Jefferies. is The question

for line on our good Thanks Hi, Blonde for evening, Bennett. questions. Andrew taking Owen

still but, Israel, lumpy, it's the market definitely of like shipments just looks going be well. So can timing around appreciate

to trending for little detail how if could you around wanted you Thank you. of rest more end quarter shipments any the there's see give year, see if been since Just a the the of the today? shipments

Israel career. I'll I've in a spent lot honor Yes, having to. my time in of the of really happy had a have I And Israel. worked lot in

recently was interesting the And is an so, situation Israel I ago, most months A one. couple with there.

I've becoming that and gentleman, Israel own thoughtful I there I've very in growers starting local that. regulators, flower thoughtful of a runs, the been in see, growing Yuval of one foremost, our and you Canadian the also and and And respectful to that regulator interest need was many don't And shipping a and significant to seen First obviously a successful growth but what's of of the I who seeing are you're name competitors, those think Israel. of their Israel, grows Landschaft, called IMCA, but I competitors, and progressive of have successfully, cannabis. in cannabis most of globally, lot my many the done you're and smart name

cannabis. with So you're quality patients a demand X about great probably in of good supply is currently is country of people XXX,XXX than what to there seeing million that more

And challenge grows, the bar market. to get also internal so, of Israel, always high quality of is the out now that particularly the IMCA sort having a it products local into high into while navigate putting to pressure very results flour, of the

to shipment a when everybody that, to so, have have we we will it. And announce we Israel, said

statement, diversified analyst towards out shipped yet you and we cold it's you happen breadths shipment when does as we But as And seeing in Israel, have Poland that market Republic in international of medical is standpoint, I we so, it's had think international you is have not or regs that beyond growth quarter. go without such to market guiding have Israel. that's, shipments as And And you that we not regular like this Israel there. at can business an are hot good these coming Australia, have internationally going have that hard going to we into we say will able into from to the balance that, you how what that. or understand, the a online. to ever do. cadence into When was But our a won didn't smooth offset overall were the have the do some I significant that anyone's business important think shipping larger pretty Czech that and markets been out. new are And

I be some going a at there. I Canadian cannabis for have what's in in will Israel So, place and export. think great seed it starting in on a genetics, propagation, Israel to on point sort leader that's of and And respect sell beyond

long in And so, obviously biotech. for I'm hopeful history Israel a is And there that. of

shipment you point, bullish, So we to at don't a are We we're tell about. have active Israel. in this

The you, from is next Thank Frederico have ATB. sir. we from question Gomes

and Glen. Miguel afternoon, Good my taking questions. Thanks for

you're some now, of what's utilizing what right conditions are of mean, now? How much even your seeing Does are capacity selling rationalization looking asset to And given last right you this in us about you other plans for the facilities the capacity right there plan and you cultivation? with Thank you. the can you doing terms a for now? for well Sky? that that facility we Just remind closing Sky, also the buyer well have as size that that a then of could currently close. that your I have as facilities Are you market for app? that are

Sure.

I terms top go facility. I'll let production clients of I'll a So overview and correct if in go line as numbers Glen on me exact the by

Ridge, facilities. primary produce domestically, they And medical, historical cultivars and we facilities cultivars. with proven both our products, and our premium are high-quality new cannabis. both on they and focus facilities are internationally, River So, rec historical extremely as They

indoor acquisition, get important all Germany know wonderful, tremendous well. We also always a well we Thrive And of highest focused a and BC in cost Whistler and grow are quality both the on for in produces that some staying Canadian are fresh Internationally, that done is extracts facility have also that what thrilled a a significantly facility and grows that we as goods in very then the craft the retain outdoor with the market, we particularly cannabis has concentrates. we we about. organic impact, as a of talked concentrates on grow

have as need our in both others, than of internal current that also fixed demand terms We in feel partnerships we our as cost. the more in what well of Netherlands. facility that Nordic have network as well we sort And with have as that our partnership confident we we the with a proper

have that disposition, about Valley our Polaris we'll my and both at there. want of that MD&A. in see authority, terms we look to partners, a with CROs particularly great the Edmonton great [indiscernible]? happen we all municipal of sort that at what we'll or production location buyer on level, the to thing business around in there'll like overall no on the same work obviously And the sky, expectation it's In interest facility. market, a and that have airport of and is talk from with be from buyer a of would Glen, we'll quantities finding And agriculture, tremendous you others issues happens a maybe bit in terms have terms

it's kilograms we've like, have a year, capacity total spec. and XXXX we cultivation, Scotland been in obviously year. more mean, pass X,XXX neighborhood, of, Whistler what biomass, then a importantly, its kilograms and and But the the Whistler, is they Ridge, of run River, then Ridge expertise I I sort the River year, more on yields know at focused XX,XXX more guess, and rates about at about stated and capacity cetera. So, before et And in like to kilograms I a

and you So batches circle be to your value. falling a hitting flower, flower XX% in for how want producing all XX%

the there. of particular is really a THC of the rates hitting River will are just of some XXX% batches Ridge consistent the hitting focusing in be pass of -- So, exceptional and reasons period that sometimes basis, on the high we're levels one a in

producing all high that's So quality for important really flower.

brands XX,XXX XX,XXX, So about of been much Thrive getting, And is cultivation as when Canada. backed exceptional focus side. with the like, What the just the we're experience. scientific quality this to cultivar In our specifications. expertise as is the thrilled the it's at obvious team up by best kilograms, selection, method great meet what's growing of and one has the state in high possible look Company growing decades really covers you're very you their is techniques, at that's but legacy that's performance, under in the to

kind folks a some are that twice, high team came getting part sometimes, been we've over real, get of that that You what quality stuff. as getting of

to So, out capacity think of our even there. and Ridge, we River plenty coming we're more got we've of excited see

I capacity there. As it Europe, about as we think far use asking goes could in you're whether

couple got next we're expansion about concerned certainly fall need can capacity there. to starting be facilities. it's in still capability And And opportunity going the get to from need supply Canada other. we're constraints everything asleep years. a we on to out of of we and export fact, there. We I from couple Canada, a but the European years. problem. of continue to the it put And In Don't over European We've can our not

the with there International So all. problems at no facilities are

from next The Matt have is sir. you, go Genuity. Canaccord Please Thank from we question Bottomley ahead.

go just questions. to to one the of back I wanted

most was but think I increase the change about reaching out, but it. towards of Apologies hasn't I million about my the The the think midpoint changed, of it the adding Andrew just in savings. asking end you're rate positive at in on EBITDA, I guidance of savings. the XX anticipated run was line there caught cutting a

maybe EBITDA, adjusted telegraph, of that savings. step So sort time in when I part last call point be adding annualized, last And fiscal of lagging at those sort cash that you a but what midpoint initiatives? point will that previously when you week it actual be the million is function it that, standpoint month into let's then of significant will of the the that from of increase understand particular sort 'XX, of increase of in time, of the adjusted are these XX and breakeven by through or say the we that some the midway achieved, in expecting given EBITDA or

start bit. to that little I'll a unpack Yes,

of of months. through we're run a execute them takes and annualized the they happening making a then today, a of a them obviously number facility and cetera, et number June, decisions, summer, happening see the some rate, some series we in of shutdown when So

QX, that been all rate them. are decisions is targeting been to be were running set shuttered have at have that we Saudis what that the savings to the are So so is the time and executed the a that everything's by that that And EBITDA positive done, shuttered. we're we by captured are

it we How annualized this from right to savings. think get it's a at before? this So to at run on I current revenue. look basis, positive to differs resize looking even rate EBITDA forward, way the As

before. need revenues we QX like said, to do a we certain at even dead $XX operational rate to telling it So at to million, hit savings. it's be take this, to So but mentioned X make lot to when shows it Sky, we cash Miguel a quarter. positive? a if you million we or you the it's know, that we a Obviously, our is be EBITDA the can don't up this you we're A that of cash step, which we why would target out like savings, this, do this what of big savings, sure take and persist, cut in business that's just to what of all took expect bigger numbers, even rate

almost $XX there's face shattering that facility. cash million So of annually saving

got execute if to plan run quarters you of about I these of here rate hard crisp here. savings, an want on and to we're think, all but that's, exceptionally couple executing sort the a we've So, it. this We've work, think continuing got

know QX. headwind inflation, margins think time. at definitely So would cost in SG&A the cover not of rationalizations least over looks market, to There's goods, to et cross cetera, through But that positive cetera. that will that like start et these if the the cuts more and a you get us going to to you we're we in expect improve, EBITDA quarter obviously,

these who why our a or I Hilton, PNG, guess AmEx. experience the new and comes is new from a background, Head place couple Kraft it. other with HR, doing is, a also new would This that make in now operations, of comes team that's who come hate of from of whether leaders some you team head do one a Yes, I from bit to has things. points a is that It's

management So, that's different they're running this. is a team -- this through

I Then Company to Glen's do the particularly enhance best right based people around structural bit getting some while see going there. overall. the and increase sensitive savings The to to I'm we and differences of something, this your not And guidance And is, current saying, a Miguel, part going to understand revenue. it. second the history I why profitability say, your we're of geez, the well, it's and upon updates these talking savings, about the may you understand raise give wouldn't continue

clarity, a So, here how transparent know on I in with the on. we guidance see execution. people of a know, wonky that's because to be bit with get we want little of bit Company. closer you the going of a timing. I the know, bit other that, time greater have we at want looked on conservative see I am aspects period want If to little It's sensitive statements a some why you inflation of a, to course, but a this, to we'll of be bit then and people terms provide how historical and

you, Thank sir.

Markets. So our Miehm final question Capital comes from RBC from Doug

Aurora to this I'm Thank go to back that just understand wanted I you. so sure I Sky.

making is site? at operating the capacity to what XX% I'm coming today. is that revenues sounds $XX it or year of then, it what million of more losing even $XX by it? a curious million just roughly And out it's are and the So,

know more than the was facilities this that I I, to market of or that okay, call this potency on was up automated the completely was And little mean, other Canadian some better XX grow, at call would global originally to mid-tier markets. as reason let I because bit. than for what the flower. Sky a Doug, one put and XX go, product created So, almost time history be with many the acceptable people me largest a automated,

of evolved character moisture, and other not and that. itself potency consumer lend the not did the then only density, bud core all of one we terps of are these things, and attributes those to that all about very sort quality talked quickly, automation. sort And As

that of might do of So, that sort rapidly. you Sky as retrofitted to of facility be well. very a And had genetically imagine, profile cultivars a different has nature

new size when with scale of cultivars so, the wanted, a for expansion and rapid impediment. of what a of sort couple business you became consumer need the of rec an bit particularly the in And that

of a particularly sky folks home margins have to internationally, the there, absolute sustain utility and in sort you whether where facility. pivoted of And higher would find for a untenable. might were you imagine, to we so, of cost, And whether that became the that created it's cost product, overall that things fixed made worked whether as kudos scenario, that would those Sky maintenance, massive that order it's and all really improvements past under it's

we we entirely was money significant cratered so, and XX%, in And which as the rec as we had that when say, there, it for sense. down to losing flour. this market consistent, became allocate a the rec untenable. that piece. flour business is of we amount it it took facility particularly focus created more, a overall prices, to product think less premium, everybody, in became almost costs the against ongoing I make little bit became And would was down on terms And sustainable really overall And our particularly when yes, didn't then, was of took Israel to what it it just of

how most would And I whether to got so, with been and And say And footprint, we we and think the whether was what think, for is have others. that's do Valley that was right to. really we Sky, I reducing that pretty previously have Sun, make business the continue in concentrate, them to thing infuse we where open. the to dollars items, into we got is, to our proactive just you the lastly overall cannabis losses, sense massive millions you structure of And vapes, millions an see keep don't pre-rolls, market, cost and right other tune of expansion need. flour, just if producing ingestibles in the of for of facilities, Canadian amount as the

Ladies turn back the remarks. sir. would reached question-and-answer you, call And go I to our have the Thank ahead, like and Please sir. of Martin closing Miguel gentlemen, end for we to session.

to thank for Hopefully, to shareholders. to what the continue is never based everybody think want Aurora us. confident We've of taking listen on time in to for about front more the people I continue targets tough have make we the we story. Well, the to been we calls understand right

is international stronger. been medical, cannabis if our sheet, If you you balance look never which core at they've look business, at the

you quarters your coverage Aurora. we're all interest about so, we in And and Thank and of excited appreciate very the much.

Ladies Thank Thank gentlemen, concludes you, sir. today's that for joining and conference. you us.

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