Aurora Cannabis Replaces CEO Amid $1 Billion Writedown
The Edmonton-based company announced that Terry Booth is stepping down from his role as Chief Executive Officer after seven years in the top job. Booth will be replaced by Executive Chairman, Michael Singer, on an interim basis. Booth will remain on the company's board in a strategic advisory role.
The change at the top comes as the pot giant looks to press the reset button following several quarters of disappointing sales and mounting losses. Aurora Cannabis also said that it will reduce its workforce by 500 staff, including 25% of all corporate positions, a decision aimed at driving down costs as it looks to end a string of quarterly losses.
And Aurora Cannabis said it plans to reduce its capital expenditure to $100 million for the second half of fiscal 2020. Specifically, the company plans to cut spending on various information technology projects, sales and marketing initiatives, travel and entertainment and professional services which do not provide an immediate impact on its revenue.
The changes come as Aurora Cannabis plans to take a write-down of between $190 million to $225 million on certain intangible and property, plant and equipment, and plans to write down another $740 million to $775 million in goodwill. It has about $156 million left in cash, excluding $45 million of restricted cash as of December 31.
Aurora Cannabis, like many cannabis companies, has faced pressure from weaker-than-expected sales, which analysts have often attributed to an illicit market that still commands the lion’s share of total marijuana spending, as well as a slow rollout of legal marijuana stores, primarily in Ontario.
Over the past year, Aurora's stock has tumbled more than 70%. Aurora will release its fiscal second-quarter results on February 12, when analysts expect the company to report $79.2 million in revenue and adjusted negative earnings before interest, taxes, depreciation, and amortization (EBITDA) of $37.5 million, according to Bloomberg data.