Aurora Cannabis (NYSC:ACB) said CEO Terry Booth to retire and Executive Chairman Michael Singer becomes interim CEO as the beleaguered marijuana producer announced $752.79-M in impairment charges Thursday.
The company also cut about 500 jobs, including about 25% of corporate positions.
Aurora’s NYSE-listed stock fell 13.5% in after-hours trading. The shares were halted earlier Thursday and are trading at 1.74 off nearly 20%
Aurora expects impairment charges of as much as C$225-M on assets and as much as C$775-M on goodwill in Q-2, it said. Net revenue will be between C$50 and C$54-M, compared with C$54.2-M a year ago.
Thursday, Aurora had made amendments to its secured credit facilities, including removal of some covenants, giving it options to refinance at maturity. Analysts have warned the company may not be able to meet the covenants of a C$360-M loan due in August 2021.
Aurora’s expenses in the most recent Quarter were almost 4X its sales, and it holds less than 2 Quarters’ worth of cash and short-term investments.
Mr. Singer takes the helm as Aurora faces criticism for its aggressive global expansion amid uncertain demand. Aurora has stopped estimating when it will become profitable after missing its own guidance.
The executive change makes Aurora the latest in a string of Canadian cannabis companies, including Canopy Growth, Aphria, Supreme Cannabis and Sundial Growers to change leadership as soaring costs and disappointing sales prompt concern from investors sitting on billions of dollars in losses.
Mr. Singer has been on the board of the Alberta-based company since May 2016 and was named executive chairman nearly a year ago.
Mr. Booth, a co-founder of the company, will remain on Aurora’s board and will become a strategic adviser to the company, Aurora said, confirming an earlier Reuters story.
“I don’t think we are going to see some sort of major strategic change, because Singer has been involved with the company and they are keeping Booth on as an adviser,” said an analyst at William O’Neill in New York. “This is to signal to the market that they are making changes.”
Aurora has begun a formal search for a permanent CEO, Mr. Booth said in the memo without providing a time frame, adding that details would be shared once the process is complete.
Booth’s departure follows the abrupt exit of Chief Commercial Officer Cam Battley in December.