Full Press Release Details
Aurora Cannabis Announces Financial Results
for the Fourth Quarter and 2019 Fiscal Year
Generates Net Revenue
of $98.9 Million, Up 52% From Prior Quarter
Cannabis Net Revenue Increases 61% to $94.6 Million From Prior Quarter
Reports Gross Margin on Cannabis Net Revenue of 58%
TSX: ACB | NYSE: ACB
EDMONTON, Sept. 11, 2019 /CNW/ - Aurora
Cannabis Inc. (the "Company" or "Aurora") (NYSE | TSX: ACB), the Canadian company defining the
future of cannabis worldwide, announced today its financial and operational results for the fourth quarter and fiscal year ended
Aurora Cannabis Q4 2019 Key Performance Indicators
(CNW Group/Aurora Cannabis Inc.)
"In 2019 Aurora took its place as the
global leader in cannabis production, research, innovation, and international market development. We are executing on all our strategic
priorities," said Terry Booth, CEO. "Our best in class cultivation methods allow us to grow consistent, high-quality
cannabis at scale. Because of this, we've delivered solid revenue growth in the fourth quarter. We are working to extend our reach
in the U.S. markets. Our partnership with the UFC is a basis to explore CBD-from-hemp and hemp food products. We are also exploring
additional opportunities and leveraging our Strategic Advisor. We are focused on building a sustainable, high-margin business while
providing patients and consumers with access to safe and reliable medicine."
Glen Ibbott, CFO, added, "We continue
to see strong growth in cannabis revenues in both medical and consumer categories. Our cultivation execution continues to drive
production costs lower and improve gross margins. Aurora's diversified product portfolio remains in demand with patients and consumers
alike. With the Canadian launch of derivative products in the coming months, we have made the necessary investments to ensure readiness
and focus on a variety of value added products. We are very excited to supply an expanded consumer market with premium cannabis
and new product forms."
Fourth Quarter 2019 Highlights
(Unless otherwise stated, comparisons are
made between Fiscal Q4 2019 and Q3 2019 results and are in Canadian dollars)
Net cannabis revenue up
61% sequentially to $94.6 million
Canadian consumer cannabis
revenue up 52% to $44.9 million
Medical cannabis revenue
up 10% to $29.7 million
Wholesale revenues of
cost to produce per gram sold declined 20% sequentially to $1.14 per gram in Q4 2019.
volume increased 86% sequentially to 29,034 kgs.
margin on cannabis net revenue increased by 3% to 58% sequentially.
medical patient base expanded 10% to 84,729 sequentially. As at the date of this release, Aurora has approximately 89,700 active
registered patients, a further increase of 6%.
Adjusted EBITDA loss of
$11.7 million represents an improvement of 68% compared to $36.6 million in Q3 2019.
an amended and upsized $360 million secured credit facility which includes an accordion feature that enables Aurora to upsize
the facility by approximately $40 million,
Sold its remaining 28,833,334
shares of The Green Organic Dutchman Holdings Ltd ("TGOD"), at a price of $3.00 per share for aggregate gross proceeds
of $86.5 million, representing an approximate 50% internal rate of return for the Company.
Fiscal 2019 Highlights
revenue of $247.9 million, up 349% compared to the prior year.
margin on cannabis net revenue of 55% in fiscal 2019 versus 65% in fiscal 2018.
Kilograms produced and
kilograms sold of 57,442 kgs and 36,628 kgs, up 920% and 629% respectively compared to fiscal 2018.
Q4 2019 Key Financial and Operational Metrics
| ($ thousands, except Operational Results) | Q4 2019 (6) | Q3 2019 | $ Change | % Change |
| Financial Results | ||||
| Net Revenue (1) | $98,942 | $65,145 | $33,797 | 52% |
| Cannabis net revenue (2)(3a) | $94,640 | $58,652 | $35,988 | 61% |
| Medical cannabis net revenue (2)(3a) | $29,651 | $27,001 | $2,650 | 10% |
| Consumer cannabis net revenue (2)(3a) | $44,882 | $29,577 | $15,305 | 52% |
| Wholesale bulk cannabis net revenue (2)(3a) | $20,107 | $2,074 | $18,033 | 869% |
| Gross margin before FV adjustments on cannabis net revenue (2)(3b) | 58% | 55% | N/A | 3% |
| Gross margin before FV adjustments on medical cannabis net revenue (2)(3b) | 60% | 60% | N/A | 0% |
| Gross margin before FV adjustments on consumer cannabis net revenue (2)(3b) | 55% | 50% | N/A | 5% |
| Gross margin before FV adjustments on wholesale bulk cannabis net revenue (2)(3b) | 61% | 60% | N/A | 1% |
| Selling, general and administration expense | $72,869 | $67,104 | $5,765 | 9% |
| Adjusted EBITDA (4) | ($11,737) | ($36,572) | $24,835 | 68% |
| Balance Sheet | ||||
| Working capital | $227,802 | $469,729 | ($241,927) | (52)% |
| Cannabis inventory and biological assets (5) | $144,275 | $118,023 | $26,252 | 22% |
| Total assets | $5,502,830 | $5,549,780 | ($46,950) | (1)% |
| Operational Results - Cannabis | ||||
| Cash cost to produce per gram sold (2)(3c) | $1.14 | $1.42 | ($0.28) | (20)% |
| Active registered patients | 84,729 | 77,136 | 7,593 | 10% |
| Average net selling price of medical cannabis (2) | $8.51 | $8.51 | $0.00 | 0% |
| Average net selling price of consumer cannabis (2) | $5.14 | $5.48 | ($0.34) | (6)% |
| Average net selling price of wholesale bulk cannabis (2) | $3.61 | $3.52 | $0.09 | 3% |
| Kilograms produced | 29,034 | 15,590 | 13,444 | 86% |
| Kilograms sold | 17,793 | 9,160 | 8,633 | 94% |
| (1) | Net revenue represents our total gross revenue cannabis products effective October 17, 2018. | |
| (2) | These terms are defined in the " Cautionary Statement Regarding Certain Performance Measures " section of this MD&A | |
| (3) | Refer to the following sections for reconciliation of non-GAAP measures to the IFRS equivalent measure: | |
| a. | Refer to the " Revenue " section for a reconciliation of cannabis net revenue to the IFRS equivalent. | |
| b. | Refer to the " Gross Margin " section for reconciliation to the IFRS equivalent. | |
| c. | Refer to the " Cash Cost of Sales of Dried Cannabis and Cash Cost to Produce Dried Cannabis Sold - Aurora Produced Cannabis " section for reconciliation to the IFRS equivalent. | |
| (4) | Adjusted EBITDA is calculated as net income (loss) excluding interest income (expense), accretion, income taxes, depreciation, amortization, changes in fair value of inventory sold, changes in fair value of biological assets, share-based compensation, foreign exchange, changes in fair value of financial instruments, gains and losses on deemed disposal, and non-cash impairment of equity investments, goodwill, and other assets. | |
| (5) | Represents total biological assets and cannabis inventory, exclusive of merchandise, accessories, supplies, and consumables. | |
| (6) | During the three months ended June 30, 2019, the Company recorded non-material year-end corrections to: (i) capitalize certain payroll, share-based compensation and borrowing costs, related to the construction of our production facilities that were incorrectly expensed in prior periods; and (ii) reverse items that had been over-accrued in prior periods. The net impact of these adjustments to Q4 2019 Adjusted EBITDA was a $14.9 million reduction in reported operating expenses |
| ($ thousands) | Three months ended | Year ended | |||||||
| June 30, 2019 | March 31, 2019 | June 30, 2019 | June 30, 2018 | June 30, 2017 | |||||
| Medical cannabis net revenue | |||||||||
| Canada dried cannabis | 14,438 | 14,501 | 58,101 | 24,231 | 14,679 | ||||
| EU dried cannabis | 4,481 | 4,004 | 14,141 | 9,835 | 439 | ||||
| Canada cannabis extracts (1) | 10,732 | 8,496 | 34,447 | 8,690 | 804 | ||||
| Total medical cannabis net revenue | 29,651 | 27,001 | 106,689 | 42,756 | 15,922 | ||||
| Consumer cannabis net revenue | |||||||||
| Dried cannabis | 41,813 | 27,461 | 88,603 | - | - | ||||
| Cannabis extracts (1) | 3,069 | 2,116 | 7,992 | - | - | ||||
| Total consumer cannabis net revenue | 44,882 | 29,577 | 96,595 | - | - | ||||
| Wholesale bulk dried cannabis net revenue | 20,107 | 2,074 | 22,181 | - | - | ||||
| Total cannabis net revenue | 94,640 | 58,652 | 225,465 | 42,756 | 15,922 |
| ($ thousands) | Three months ended | Year ended | |||||||
| June 30, 2019 | March 31, 2019 | June 30, 2019 | June 30, 2018 | June 30, 2017 | |||||
| Net revenue | 98,942 | 65,145 | 247,939 | 55,196 | 18,067 | ||||
| Design, engineering and construction services | - | (914) | (2,403) | (4,218) | - | ||||
| Patient counseling services | (606) | (809) | (4,214) | (3,933) | (2,145) | ||||
| Analytical testing services | (317) | (1,238) | (2,976) | - | - | ||||
| Other cannabis segment revenues | |||||||||
| (accessories, hemp, other) | (2,760) | (962) | (10,370) | (1,865) | - | ||||
| Horizontally integrated business revenues | (619) | (2,570) | (2,511) | (2,424) | - | ||||
| Cannabis net revenue | 94,640 | 58,652 | 225,465 | 42,756 | 15,922 |
Consolidated net revenue increased 52% to $98.9
million in Q4 2019 as compared to $65.1 million in the prior quarter. Consumer cannabis revenues were $44.9 million in Q4 2019,
an increase of 52% from the prior quarter and contributed 45% to total consolidated net revenue. Canadian medical cannabis net
revenues increased to $25.2 million in Q4 2019, up 9% over the prior quarter. Revenue growth was primarily driven by additional
production capacity and supply available for sale from Aurora Sky and Aurora River (Bradford).
Average net selling price of cannabis decreased
by $1.08 per gram over the prior quarter from $6.40 in Q3 2019 to $5.32 in Q4 2019. This decrease is primarily attributable to
the increase in sale volumes to consumer and bulk wholesale markets which yield lower average net selling prices as compared to
Gross margin on cannabis net revenue increased
to 58% in Q4 2019, compared to 55% in the prior quarter. Gross margin improvement was driven by the continued decline in cash cost
to produce per gram and higher gross margins achieved on bulk sales.
During Q4 2019, Aurora produced 29,034 kilograms
of cannabis as compared to 15,590 kilograms in the prior quarter. The 86.2% increase in production output was primarily due to
the additional production capacity added by Aurora Sky, River (Bradford), and Ridge (Markham) facilities. Extraction capacity increased
from 20,400 kilograms to 26,400 kilograms in Q4 2019. Subsequent to the quarter end, Aurora's annual extraction capacity
further increased to 45,600 kilograms.
Q4 2019 SG&A increased by 9% to $72.9 million,
compared to the prior quarter. The change was primarily driven by an increase in fulfillment and shipping costs related to the
growth in consumer cannabis sales and continued investment in sales initiatives, distribution network, and partnerships to conduct
research, develop products, and drive brand awareness. Aurora will continue to invest in infrastructure and talent required for
market share growth in the global medical and consumer cannabis markets but will remain intensely focused doing this as efficiently
In Q4 2019, adjusted EBITDA loss improved 68%
to $11.7 million from $36.6 million in the prior quarter. Developing a profitable and robust global cannabis company is extremely
important to Aurora. In fiscal 2019 Aurora was focused on excellence in execution, and the Company's KPIs show its success in this
regard. Furthermore, Aurora has addressed previously identified production bottlenecks and continues to see strong sell-through
of the Company's products at the retail level. However, the Canadian consumer channel continues to experience challenges at the
retail level in key markets and resolution of this issue is beyond the Company's control. Aurora is working closely with all our
regulatory and channel partners to streamline distribution as the Company continues to track toward positive adjusted EBITDA on
a consolidated basis.
The Company's operating facilities current
annualized run-rate production capacity is in excess of 150,000 kg per annum, based on planted rooms. As the industry leader
in purpose-built cultivation, Aurora is focused on producing a consistent supply of high-quality, low-cost product to meet evolving
market demand. Aurora is well-positioned to respond to market conditions quickly with shorter lead times, increased harvest cycles
and high plant yields.
The global cannabis and hemp markets represent
a significant opportunity for Aurora and the Company will continue to make the necessary investments today to build long-term value
for shareholders. However, Aurora will take a balanced approach to these investments with a focus on operating a sustainable and
profitable business.
The introduction of new product formats to
the Canadian consumer market this fall represents a significant opportunity for the Company. Aurora expects to have a robust product
line-up ready to launch in December. Given the very early stage of development of the consumer market in Canada and international
medical markets, management anticipates that quarter to quarter sales volumes and revenues may be volatile. The Company expects
adjusted EBITDA to continue to improve in the future due to expected revenue growth, improvements in gross margin and prudent SG&A