Full Press Release Details
Aurora Cannabis Announces Fiscal 2021
Second Quarter Results
EDMONTON, AB, Feb. 11, 2021 /CNW/ - Aurora
Cannabis Inc. (the "Company" or "Aurora") (NYSE: ACB) (TSX: ACB), the Canadian company defining
the future of cannabinoids worldwide, today announced its financial and operational results for the second quarter of fiscal 2021
ended December 31, 2020.
"Aurora had an excellent second quarter,
and I'm pleased that we're advancing nicely against the plan we laid out in September of 2020," stated Miguel Martin, Chief
Executive Officer of Aurora Cannabis. "For the period, our core revenue strength in medical and consumer was complemented
by initial rollouts in vape products and concentrates. Combined, these elements are part of the proven, regulated CPG strategy
we've adopted. Adjusted EBITDA for the quarter, while vastly improved year over year, was impacted by several decisions that
we believe will clear a path for our premium product focus and more variable cost model. We are confident that this will give Aurora
maximum flexibility and position the organization to drive significant cashflow in the coming quarters."
"To further support this strategy, we
have also focused on improving our cash burn, margins and overall financial flexibility. To that point, our year over year
cash use has decreased by 74% to $70.5 million, our normalized margins remain solid particularly in medical, and our recently amended
credit facility gives Aurora much improved optionality as opportunities arise. Combined with $565 million in cash on our
balance sheet today, Aurora will continue to be a long-term player in the global cannabinoid market and increasingly positioned
to deliver for shareholders over the long run."
Second Quarter 2021 Highlights
(Unless otherwise stated, comparisons are made between fiscal Q2 2021 and Q2 2020 results and are in Canadian dollars)
Q2 2021 total and cannabis net revenue1
before provisions was $70.3 million, an 11% increase over Q2 2020 and 2.5% sequentially. After accounting for return and price
provisions, Q2 2021 total cannabis net revenue was $67.7 million, a 28% increase in cannabis net revenue1 over
fiscal Q2 of the prior year.
Adjusted gross margin before fair value adjustments
on cannabis net revenue1 was 42% in Q2 2021, versus 48% in Q2 2020. The decrease is due to the purposeful reduction
in production levels at Aurora Sky resulting in an increase in cash cost of sales due to the under-utilization of capacity. Also
impacting adjusted gross margin was a $1.8 million increase in actual net returns, price adjustments and provisions primarily relating
to company-initiated product returns meant to open channels to newer, higher-potency flower that Aurora is now producing.
Normalizing for these impacts, adjusted gross margin was 52%.
| _____________________ |
| 1 These terms are non-GAAP measures, see "Non-GAAP Measures" below. |
Adjusted EBITDA1 loss was $16.8
million in Q2 2021, which includes termination and restructuring costs of $2.9 million. Excluding restructuring costs and product
return provisions, the Company's Adjusted EBITDA loss is $12.1 million.
Selling, General and Administrative ("SG&A")
and Adjusted EBITDA:
Additional Financial Information:
Fiscal Q2 2021 Cash Use: Significant
Improvement in Cash Used in Operations
Total cash use in Q2 2021 showed significant
improvement relative to both Q2 2020 and Q1 2021.
In Q2 2021, the Company used $22.7 million
in cash to fund operations, excluding working capital investments. This use included $2.1 million in restructuring/termination
payments. Cash used to pay for capital expenditures, net of disposals, in Q2 2021 was $8.8 million versus $15.0 million in the
prior quarter, as many long-lead projects are now complete. 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 and consistently
over the past several quarters.
Increased net working capital used $30.4 million
in the quarter, driven by a $23.9 million decrease in accounts payable and a $11.7 million increase in prepaids, offset by a $16.4
million decrease in accounts receivable. Within working capital, inventory and biological assets used $10.0 million, a marked improvement
from the $25.1 million in Q1 2021 demonstrating the Company's progress to more closely align production levels with demand.
Given Aurora's continued strong gross margins,
reduced level of SG&A expense and capital expenditures, and ongoing improvements in working capital investment, management
expects the Company to continue its progress toward positive cash flow.
The main components of cash source and use
in Q2 2021 were as follows:
| ($ thousands) | Q2 2021 | Q2 2020 (3) | Q1 2021 |
| Cash Flow | |||
| Cash, Opening | $133,678 | $152,526 | $162,179 |
| Cash used in operations | ($22,709) | ($84,766) | ($72,580) |
| Working capital change | ($30,433) | ($54,238) | ($37,012) |
| Capital expenditures | ($8,837) | ($128,405) | ($14,980) |
| Debt and interest payments | ($8,559) | ($5,579) | ($18,212) |
| Cash use | ($70,538) | ($272,988) | ($142,784) |
| Proceeds raised from sale of marketable securities and investments in associates | $6,135 | - | - |
| Proceeds raised through debt | - | $14,394 | - |
| Proceeds raised through equity financing (1) | $365,111 | $262,402 | $114,283 |
| Cash raised | $371,246 | $276,796 | $114,283 |
| Cash, Ending (2) | $434,386 | $156,334 | $133,678 |
| (1) | Includes impact of FX on USD cash raised from financing |
| (2) | Ending cash balance above includes $50.0M restricted cash as required under the amended BMO Credit Facility. The $50.0M restricted cash can be used to repay, at any time at the Company's discretion the outstanding principal on its term loan on a 1:1 basis with a corresponding reduction in the restricted cash balance requirement. |
| (3) | Previous reported amounts have been restated to adjust for the change in accounting policy for inventory costing relating to by-products and the allocation of production management staff salaries. Refer to Note 2(e) of the unaudited Condensed Consolidated Interim Financial Statements for a reconciliation on the change in accounting policy. |
Refer to "Condensed Consolidated Interim
Statement of Cash Flows" in the "Condensed Consolidated Interim Financial Statements (unaudited)" for our cash flow
statements prepared in accordance with IAS 7 - Statement of Cash Flows.
Q2 2021 Key Financial and Operational Metrics
| ($ thousands, except Operational Results) | Q2 2021 | Q1 2021 | $ Change | % Change | Q2 2020 | $ Change | % Change | ||||||
| Financial Results | |||||||||||||
| Total net revenue (1) | $67,673 | $67,812 | ($139) | 0 | % | $55,138 | $12,535 | 23 | % | ||||
| Cannabis net revenue (1)(2)(3a) | $67,673 | $67,812 | ($139) | 0 | % | $52,676 | $14,997 | 28 | % | ||||
| Medical cannabis net revenue (2)(3a) | $38,856 | $33,474 | $5,382 | 16 | % | $27,386 | $11,470 | 42 | % | ||||
| Consumer cannabis net revenue (1)(2)(3a) | $28,573 | $34,338 | ($5,765) | (17) | % | $22,906 | $5,667 | 25 | % | ||||
| Wholesale bulk cannabis net revenue (2)(3a) | $244 | $- | $244 | N/A | $2,384 | ($2,140) | (90) | % | |||||
| Adjusted gross margin before FV adjustments on cannabis net revenue (2)(3b) | 42 | % | 48 | % | N/A | (6) | % | 48 | % | N/A | (6) | % | |
| Adjusted gross margin before FV adjustments on medical cannabis net revenue (2)(3b) | 56 | % | 59 | % | N/A | (3) | % | 59 | % | N/A | (3) | % | |
| Adjusted gross margin before FV adjustments on consumer cannabis net revenue (2)(3b) | 27 | % | 38 | % | N/A | (11) | % | 33 | % | N/A | (6) | % | |
| Adjusted gross margin before FV adjustments on wholesale bulk c annabis net revenue (2)(3b) | (305) | % | N/A | N/A | N/A | 61 | % | N/A | (366) | % | |||
| SG&A expense | $41,972 | $44,324 | ($2,352) | (5) | % | $87,301 | ($45,329) | (52) | % | ||||
| R&D expense | $2,432 | $2,584 | ($152) | (6) | % | $6,775 | ($4,343) | (64) | % | ||||
| Adjusted EBITDA (2) (3c) | ($16,802) | ($57,891) | $41,089 | (71) | % | ($69,857) | $53,055 | (76) | % | ||||
| Balance Sheet | |||||||||||||
| Working capital (6) | $592,746 | $201,425 | $391,321 | 194 | % | $400,070 | $192,676 | 48 | % | ||||
| Cannabis inventory and biological assets (2)(4) | $179,502 | $166,178 | $13,324 | 8 | % | $200,868 | ($21,366) | (11) | % | ||||
| Total assets (6) | $2,830,190 | $2,757,272 | $72,918 | 3 | % | $4,656,046 | ($1,825,856) | (39) | % | ||||
| Operational Results - Cannabis | |||||||||||||
| Average net selling price of dried cannabis (2) | $4.00 | $3.72 | $0.28 | 8 | % | $4.69 | ($0.69) | (15) | % | ||||
| Kilograms sold (5) | 15,253 | 16,139 | (886) | (5) | % | 9,501 | 5,752 | 61 | % |
| (1) | Includes the impact of actual and expected product returns and price adjustments (three months ended December 31, 2020 - $2.7 million; three months ended September 30, 2020 - $0.8 million). | |
| (2) | These terms are defined in the "Cautionary Statement Regarding Certain Non-GAAP Performance Measures" section of the MD&A. Excluding product return provisions and restructuring charges, Adjusted EBITDA is $12.1 million. | |
| (3) | 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. | |
| (4) | Represents total biological assets and cannabis inventory, exclusive of merchandise, accessories, supplies and consumables. | |
| (5) | The kilograms sold is offset by the grams returned during the period. | |
| (6) | In accordance with IFRS 3 - Business Combinations, acquisition date fair values assigned to the Reliva purchase price allocation and goodwill have been adjusted, within the applicable measurement period, where new information is obtained about facts and circumstances that existed at the acquisition date. Refer to Note 12 of the Financial Statements. |
Events Subsequent to Q2 2021 Quarter End
Aurora will host a conference call today, February
11, 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. A question and answer session will follow management's presentation.
| DATE: | Thursday, February 11, 2021 | |
| TIME: | 5:00 p.m. Eastern Time | 3:00 p.m. Mountain Time | |
| WEBCAST: | http://public.viavid.com/index.php?id=143267 |
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,
AltaVie, MedReleaf, CanniMed, Whistler, and Reliva CBD. Providing customers with innovative, high-quality cannabis products, Aurora's
brands continue to break through as industry leaders in the medical, performance, wellness and recreational markets wherever they
are launched. For more information, please visit our website at www.auroramj.com.
Aurora's common shares trade on the TSX and
NYSE under the symbol "ACB", and is a constituent of the S&P/TSX Composite Index.
Forward Looking Statements
This news release includes certain statements
which may constitute "forward-looking information" and "forward-looking statements" within the meaning of Canadian
securities law requirements (collectively, "forward-looking statements" or "FLS"). These forward-looking statements
are made as of the date of this press release and the Company does not intend, and does not assume any obligation, to update these
FLS, except as required under applicable securities legislation. FLS relate to future events or future performance and reflect
Company management's expectations or beliefs regarding future events. In certain cases, FLS 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 FLS 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 FLS. The Company provides no assurance that FLS 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 FLS. Certain FLS
in this press release include, but are not limited to the following:
The above and other aspects of the Company's
anticipated future operations are forward-looking in nature and, as a result, are subject to certain risks and uncertainties. Although
the Company believes that the expectations reflected in these FLS are reasonable, undue reliance should not be placed on them as
actual results may differ materially from the forward-looking statements. Such FLS are estimates reflecting the Company's best