Full Press Release Details
Aurora Cannabis Announces Fiscal 2021 Fourth
EDMONTON, AB, Sept. 27, 2021 /CNW/ - Aurora Cannabis
Inc. (the "Company" or "Aurora") (NASDAQ: ACB) (TSX: ACB), the Canadian company defining the future of cannabinoids
worldwide, today announced its financial and operational results for the fourth quarter and full year fiscal 2021 ended June 30, 2021.
"We are very pleased with our strategic and financial
progress in growing our high-margin medical revenue, rationalizing expenses, strengthening our balance sheet, and reducing our cash burn
during fiscal year 2021. Given ongoing challenges in the Canadian adult recreational market, our broad diversification across domestic
medical, international medical, and adult recreational segments provides us with underlying strength, stability, and growth opportunities
in an evolving industry for global cannabinoids. Additionally, our enviable leadership position as the #1 Canadian LP in global medical
cannabis by revenue on a trailing twelve-month basis, supported by regulatory and compliance expertise, is a tailwind that we expect to
enable us to ultimately expand into global adult recreational as medical regimes evolve" stated Miguel Martin, Chief Executive Officer
"During the quarter, we delivered another strong
yet steady performance in domestic medical, the largest federally regulated medical market globally, exceptional year-over-year growth
in our high-margin international medical segment, where we remain the #2 Canadian LP by revenue on a trailing twelve-month basis, and
quarterly sequential growth in adult recreational which included higher sales of premium cultivars. We are now delighted to announce a
long-term supply agreement with Cantek in Israel that we expect to provide us with a steady stream of high-margin revenue that could also
evolve into a larger partnership over time. We further believe our Canadian adult recreational segment is poised for recovery due to our
product portfolio enhancements coupled with an acceleration of new store openings and rising consumer demand," he continued.
"We have positioned ourselves for long-term success
by delivering further improvement in our industry-leading Adjusted gross margin and substantially narrowing our Adjusted EBITDA loss compared
to the year-ago period. With annual cost savings of approximately $60 to $80 million across selling, general and administrative ("SG&A"),
production cost, facility and logistic expenses, we have a clear pathway to achieve Adjusted EBITDA profitability. Importantly, our considerable
cash balance of $440.9 million, substantial improvement in working capital, and strong balance sheet support our organic growth and can
be utilized for opportunistic M&A, particularly in the U.S," he concluded.
Fourth Quarter 2021 Highlights
(Unless otherwise stated, comparisons are made between fiscal Q4 2021 and Q4 2020 results and are in Canadian dollars)
Selling, General and Administrative ("SG&A"):
Operational Efficiency Plan, Balance Sheet Strength,
& Working Capital Improvement
Aurora has identified cash savings of $60 million
to $80 million. We expect to deliver $30 million to $40 million of annualized cash savings within the next year, and the remainder by
the end of Q2 fiscal 2023.
| ___________________________________ | |
| 1 | These terms are non-GAAP measures, see "Non-GAAP Measures" below. |
Approximately 60% of the savings are expected to be
driven out of our network through asset consolidation, and operational and supply chain efficiencies. In fact, last week we announced
the centralization of much of our Canadian manufacturing processes to our River facility in Bradford, Ontario and the resultant closure
of our western Canada manufacturing facility. The remaining 40% of savings are intended to be sourced through SG a portion of those
savings will be via insurance structures that are already partially executed.
These cash savings will be reflected in our P&L
either as they occur for SG&A savings, or as inventory is drawn down for production-related savings. These efficiencies are
incremental to the approximately $300 million of total cost reductions achieved since the announcement of the Company's business transformation
plan in February 2020.
Aurora materially improved its balance sheet during
fiscal year 2021 through a number of purposeful actions including repaying the credit facility in full in June 2021, which resulted in
interest and principal repayment reductions of approximately $25 million annually. The Company views a strong balance sheet as critical
to operating the business, executing its strategic plans, and pursuing growth opportunities in an unconstrained manner, including within
At June 30, 2021 Aurora has a cash balance of approximately
$440.9 million, comprised of $421.5 million of cash and cash equivalents and $19.4 million in restricted cash, no secured term debt, and
access to US$1 billion of capital under its shelf prospectus.
The Company's focus on realizing operational efficiencies
and ability to manage cash has greatly improved operating cash flow; reducing the need for incremental capital. In Q4 2021, Aurora managed
cash flow tightly using $7.8 million in cash to fund operations, including working capital investments and restructuring and severance
payments of $5.1 million. Cash inflow from capital expenditures, net of $17.5 million disposals and government grant income, in Q4 2021
was $6.2 million versus $32.8 million of cash used in Q4 2020 and $12.2 million of cash used in Q3 2021. Cash used in operations and for
capital expenditures are crucial metrics in Aurora's drive toward generating sustainable positive free cash flow, and both have improved
significantly over the past year. The Company's ongoing business transformation, with the additional cost efficiency savings described
earlier, is expected to move the operating cash flow metric in a positive direction over the coming quarters.
Fiscal Q4 2021 Cash Use
The main components of cash source and use in Q4 2021
| ($ thousands) | Q4 2021 | Q4 2020 (4) | Q3 2021 (4) |
| Cash Flow | |||
| Cash, Opening | $520,238 | $230,208 | $434,386 |
| Cash used in operations including working capital | ($7,840) | ($64,199) | ($66,215) |
| Capital expenditures, net of disposals and government grant income | $6,230 | ($32,789) | ($12,320) |
| Debt and interest payments | ($90,141) (3) | ($52,979) | ($7,766) |
| Cash use | ($91,751) | ($149,967) | ($86,301) |
| Proceeds raised from sale of marketable securities and investments in associates | 11,929 | 33,673 | $- |
| Proceeds raised through debt | - | - | - |
| Proceeds raised through equity financing | $435 | $48,265 | $172,153 (1) |
| Cash raised | $12,364 | $81,938 | $172,153 |
| Cash, Ending | $440,851 | $162,179 | $520,238 (2) |
| (1) | Includes impact of foreign exchange rates on USD cash raised from financing |
| (2) | Includes restricted cash of $50.0M for Q3 2021 held as cash collateral under the BMO Credit Facility. |
| (3) | Includes $88.7 million full principal repayment on the BMO Credit Facility. As of June 30, 2021, the BMO Credit Facility has been fully settled and discharged. |
| (4) | Previously reported amounts have been retroactively recast for the biological assets and inventory non-material prior period error. Refer to the " Significant Accounting Policies and Judgments " section in Note 2(h) of the Financial Statements. |
Refer to the "Consolidated Statement of Cash
Flows" in the "Consolidated Financial Statements" for our cash flow statements prepared in accordance with IAS 7 - Statement
| ($ thousands, except Operational Results) | Q4 2021 | Q4 2020 (5)(6) | $ Change | % Change | Q3 2021 (5)(6) | $ Change | % Change | |||||||
| Financial Results | ||||||||||||||
| Total net revenue (1) | $54,825 | $68,426 | ($13,601) | (20) | % | $55,161 | ($336) | (1) | % | |||||
| Cannabis net revenue (1)(2a) | $54,825 | $67,492 | ($12,667) | (19) | % | $55,161 | ($336) | (1) | % | |||||
| Medical cannabis net revenue (2a) | $35,022 | $32,226 | $2,796 | 9 | % | $36,378 | ($1,356) | (4) | % | |||||
| Consumer cannabis net revenue (1)(2a) | $19,514 | $35,266 | ($15,752) | (45) | % | $18,023 | $1,491 | 8 | % | |||||
| Adjusted gross margin before FV adjustments on cannabis net revenue (2b) | 54 | % | 49 | % | N/A | 5 | % | 44 | % | N/A | 10 | % | ||
| Adjusted gross margin before FV adjustments on medical cannabis net revenue (2b) | 68 | % | 64 | % | N/A | 4 | % | 53 | % | N/A | 15 | % | ||
| Adjusted gross margin before FV adjustments on consumer cannabis net revenue (2b) | 31 | % | 36 | % | N/A | (5) | % | 33 | % | N/A | (2) | % | ||
| SG&A expense | $46,902 | $57,969 | ($11,067) | (19) | % | $41,684 | $5,218 | 13 | % | |||||
| R&D expense | $3,034 | $7,645 | ($4,611) | (60) | % | $3,398 | ($364) | (11) | % | |||||
| Adjusted EBITDA (2c) | ($19,256) | ($33,349) | $14,093 | 42 | % | ($23,853) | $4,597 | 19 | % | |||||
| Balance Sheet | ||||||||||||||
| Working capital | $549,517 | $145,258 | $404,259 | 278 | % | $646,310 | ($96,793) | (15) | % | |||||
| Cannabis inventory and biological assets (3) (2)(3)(7) | $120,297 | $135,973 | ($15,676) | (12) | % | $102,637 | $17,660 | 17 | % | |||||
| Total assets | $2,604,731 | $2,779,921 | ($175,190) | (6) | % | $2,839,155 | ($234,424) | (8) | % | |||||
| Operational Results - Cannabis | ||||||||||||||
| Average net selling price of dried cannabis excluding bulk sales (2) | $5.11 | $3.60 | $1.51 | 42 | % | $5.00 | $0.11 | 2 | % | |||||
| Kilograms sold (4) | 11,346 | 16,748 | (5,402) | (32) | % | 13,520 | (2,174) | (16) | % |
| (1) | Includes the impact of actual and expected product returns and price adjustments (Q4 2021 - $0.7 million; Q3 2021 - $3.2 million; Q4 2020 - $1.9 million). |
| (2) | These terms are defined in the " Cautionary Statement Regarding Certain Non-GAAP Performance Measures " of the MD&A. Refer to the following MD&A 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 " Cost of Sales and Gross Margin " section for reconciliation to the IFRS equivalent. | |
| c. Refer to the " Adjusted EBITDA" section for reconciliation to the IFRS equivalent. | |
| (3) | Represents total biological assets and cannabis inventory, exclusive of merchandise, accessories, supplies and consumables. |
| (4) | The kilograms sold is offset by the grams returned during the period. |
| (5) | As a result of the Company's dissolution and divestment of its wholly owned subsidiaries, Hempco Food and Fiber Inc. ("Hempco"), Aurora Larssen Projects ("ALPS"), Aurora Hemp Europe ("AHE"), the operations of Hempco, ALPS and AHE have been presented as discontinued operations and the Company's operational results have been retroactively restated, as required. Refer to Note 12(b) of the Financial Statements for more information about the divestitures. |
| (6) | Amounts have been retroactively recast for the biological assets and inventory non-material prior period error. Refer to the " Significant Accounting Policies and Judgments " section in Note 2(h) of the Financial Statements. |
Aurora will host a conference call today, September
27, 2021, to discuss these results. Miguel Martin, Chief Executive Officer, and Glen Ibbott, Chief Financial Officer, will host
the call starting at 5:00 p.m. Eastern time / 3:00 p.m. Mountain Time. A question and answer session will follow management's presentation.
Conference Call Details
| DATE: | Tuesday, September 27, 2021 | |
| TIME: | 5:00 p.m. Eastern Time | 3:00 p.m. Mountain Time | |
| WEBCAST: | http://public.viavid.com/index.php?id=146159 |
Investors may submit questions in advance or during
the conference call itself through same weblink listed above. This weblink has also been posted to the Company's "Investor Info"
link at https://investor.auroramj.com/ under "News & Events".
Aurora is a global leader in the cannabis industry
serving both the medical and consumer markets. Headquartered in Edmonton, Alberta, Aurora is a pioneer in global cannabis dedicated to
helping people improve their lives. The Company's brand portfolio includes Aurora, Aurora Drift, San Rafael '71, Daily Special, MedReleaf,
CanniMed, Whistler, and Reliva CBD. Driven by science and innovation, and with a focus on high-quality cannabis products, Aurora's brands
continue to break through as industry leaders in the medical, performance, wellness and adult recreational markets wherever they are launched.
For more information, please visit our website at www.auroramj.com.
Aurora's common shares trade on the NASDAQ and TSX
under the symbol "ACB" and is a constituent of the S&P/TSX Composite Index.
Forward Looking Statements
This news release contains certain statements which
may constitute "forward-looking information" and "forward-looking statements" within the meaning of Canadian securities
law requirements (collectively, "forward-looking statements"). These forward-looking statements are made as of the date of this
news release and the Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as
required under applicable securities legislation. Forward-looking statements relate to future events or future performance and reflect
Company management's expectations or beliefs regarding future events. In certain cases, forward-looking statements can be identified by
the use of words such as "plans", "expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate",
or "believes", or variations of such words and phrases or statements that certain actions, events or results "may",
"could", "would", "might" or "will be taken", "occur" or "be achieved" or
the negative of these terms or comparable terminology. In this document, certain forward-looking statements are identified by words including
"may", "future", "expected", "intends" and "estimates". By their very nature forward-looking
statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements
of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking
statements. The Company provides no assurance that forward-looking statements will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking
statements. Forward-looking statements in this news release include, but are not limited to, statements with respect to: :
The above and other aspects of the Company's anticipated