Full Press Release Details
Aurora Cannabis Announces Fiscal 2022 Third Quarter
EDMONTON, AB, May 12, 2022 /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 third quarter fiscal 2022 ended March 31, 2022.
"We continue to steer our differentiated global
cannabis business towards long term shareholder value creation. This is being accomplished through a sole focus on the most profitable
growth opportunities, rationalization of our Canadian cost structure and disciplined use of capital. Our plan is working and we remain
firmly on track to achieving a positive Adjusted EBITDA run rate by the first half of fiscal 2023. Today, we are announcing further cost
savings which will enable us to increase our range of savings under our business transformation plan from $60 to $80 million to $150 to
$170 million. Our balance sheet also remains among the strongest in the industry, enabling the repurchase of $141.4 million in convertible
debt early, while also providing meaningful working capital to support organic growth and pursue strategic M&A, such as our recent
acquisition of Thrive Cannabis," stated Miguel Martin, Chief Executive Officer of Aurora.
"During Q3, we continued focusing on our global
medical cannabis business because it is both defensive and stable, with cash gross margins that exceed 60%. We were pleased to have experienced
considerable top-line growth in this segment year over year, and with new international markets poised to open, our track record and ability
to navigate complex regulatory environments position us ideally for a significant revenue opportunity globally. In terms of the
Canadian adult-use market, we continue to adjust to current conditions, are excited for future contributions from the Thrive team, and
are committed to a continuous stream of innovation, including advancing our premiumization strategy," he concluded.
Third Quarter 2022 Highlights
(Unless otherwise stated, comparisons are made between fiscal Q3 2022, Q2 2022, and Q3 2021 results and are in Canadian dollars)
Selling, General and Administrative ("SG&A"):
Operational Efficiency Plan, Balance Sheet Strength,
Aurora has previously identified annualized cash savings of $60 million to $80 million and now expects to surpass the high end
of this range with an additional $70 million to $90 million in savings by the end of H1 fiscal 2023, split evenly between costs of goods
sold ("COGS") and SG&A, for a total of up to $170 million in cash savings under this transformation program. Projected COGS
savings now include the closure of the Aurora Sky facility in Edmonton (previously announced to be operating at approximately 25% capacity),
in keeping with our diversified business portfolio, prudent approach to capital allocation, and our strategy in the Canadian adult-use
market to focus on higher margin premium categories. These cash savings will be reflected in our P&L either as they occur within SG&A
savings, or as inventory is drawn down for production-related savings.
Resulting from these strategic changes, management
concluded that the carrying value of goodwill in the Canadian market segment was impaired and that asset specific impairments were required
for production facilities being made redundant. As a result of these decisions, Aurora recorded a number of one-time non-cash charges
in Q3 2022 including a write down of goodwill of $741.7 million, asset-specific impairments of $176.1 million, and an inventory provision
charge of $63.6 million.
At March 31, 2022, Aurora had $480.6 million of cash,
including $50.7 million in restricted cash, no secured term debt, and access to US$887.6 million of capital under its shelf prospectus,
including an at-the-market (ATM) facility, of which currently US$187.6 million remains under the program. As disclosed previously, management
considers the ATM to be available for strategic purposes.
During Q3 2022, Aurora repurchased a total of $13.4
million (US$10.6 million) in principal amount of convertible debt at a total cost, including accrued interest, of $11.8 million (US$9.3
million). Subsequent to Q3 2022, Aurora repurchased a total of $128.0 million (US$100.0 million) in principal amount of convertible debt
at a total cost, including accrued interest, of $122.9 million (US$96.0 million). Aurora may, from time to time and subject to market
conditions, repurchase its convertible debt, including in open market purchases and privately negotiated transactions.
| _______________________________ |
| 1 These terms are non-GAAP measures, see "Non-GAAP Measures" below. |
Aurora continues to materially improve cash use, as outlined in the following table:
| ($ thousands) | Q3 2022 | Q2 2022 | Q3 2021 (2) |
| Cash, Opening (1) | $383,753 | $424,301 | $434,386 |
| Cash used in operations, including working capital | -$39,303 | -$20,298 | -$66,215 |
| Capital expenditures and investments, net of disposals and government grant income | $9,879 | -$11,497 | -$12,320 |
| Debt and interest payments | -$12,947 | -$8,753 | -$7,766 |
| Cash use | -$42,371 | -$40,548 | -$86,301 |
| Proceeds raised from sale of marketable securities and investments in associates | - | - | - |
| Proceeds raised through debt | - | - | - |
| Proceeds raised through equity financing | $139,170 | - | $172,153 |
| Cash raised | $139,170 | - | $172,153 |
| Cash, Ending (1) | $480,552 | $383,753 | $520,238 |
| (1) | Includes restricted cash of $50.7M at Q3 2022, $51.3M at Q2 2022, and $50.0M at Q3 2021. |
| (2) | Previously reported amounts have been retroactively recast for the biological assets and inventory non-material prior period error. Refer to the " Significant Accounting Policies and Judgments " section in Note 2(d) of the Financial Statements. |
Refer to the "Consolidated Statement of Cash
Flows" in the "Consolidated Financial Statements" for our cash flow statements prepared in accordance with IAS 7 - Statement
| ($ thousands, except Operational Results) | Q3 2022 | Q3 2021 (1)(2) | $ Change | % Change | Q2 2022 | $ Change | % Change |
| Financial Results | |||||||
| Total net revenue (3) | $50,434 | $55,161 | ($4,727) | (9%) | $60,586 | ($10,152) | (17%) |
| Medical cannabis net revenue (3)(4a) | $39,359 | $36,378 | $2,981 | 8% | $45,748 | ($6,389) | (14%) |
| Consumer cannabis net revenue (3)(4a) | $10,339 | $18,023 | ($7,684) | (43%) | $14,373 | ($4,034) | (28%) |
| Adjusted gross margin before FV adjustments on cannabis net revenue (4b) | 54% | 44% | N/A | 10% | 53% | N/A | 1% |
| Adjusted gross margin before FV adjustments on medical cannabis net revenue (4b) | 64% | 53% | N/A | 11% | 63% | N/A | 1% |
| Adjusted gross margin before FV adjustments on consumer cannabis net revenue (4b) | 29% | 33% | N/A | (4%) | 23% | N/A | 6% |
| SG&A expense | $39,630 | $41,684 | ($2,054) | (5%) | $42,961 | ($3,331) | (8%) |
| R&D expense | $2,637 | $3,398 | ($761) | (22%) | $1,625 | $1,012 | 62% |
| Adjusted EBITDA (4c) | ($12,263) | ($20,928) | $8,665 | 41% | ($9,040) | ($3,223) | (36%) |
| Balance Sheet | |||||||
| Working capital | $577,566 | $646,310 | ($68,744) | (11%) | $481,574 | $95,992 | 20% |
| Cannabis inventory and biological assets (5) | $118,729 | $102,637 | $16,092 | 16% | $139,625 | ($20,896) | (15)% |
| Total assets | $1,570,252 | $2,839,155 | ($1,268,903) | (45%) | $2,485,384 | ($915,132) | (37)% |
| Operational Results - Cannabis | |||||||
| Average net selling price of dried cannabis excluding bulk sales (4) | $5.41 | $5.00 | $0.41 | 8% | $4.52 | $0.89 | 20% |
| Kilograms sold (6) | 9,722 | 13,520 | (3,798) | (28%) | 13,043 | (3,321) | (25)% |
| (1) | Amounts have been retroactively recast for the biological assets and inventory non-material prior period error. Refer to the " Change in Accounting Policies and Estimates" section below for further detail. | |
| (2) | As a result of the Company's dissolution and divestment of its wholly-owned subsidiaries, Hempco and AHE, during the year ended June 30, 2021, the operations of Hempco 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 and Note 12(b) of the annual audited consolidated financial statements for the year ended June 30, 2021 for additional information. | |
| (3) | Includes the impact of actual and expected product returns and price adjustments (Q3 2022 - $0.4 million; Q2 2022 - $3.7 million; Q3 2021 - $3.2 million). | |
| (4) | These terms are defined in the " Cautionary Statement Regarding Certain Non-GAAP Performance Measures " section of this MD&A. 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 " 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. | |
| (5) | Represents total biological assets and cannabis inventory, exclusive of merchandise, accessories, supplies and consumables. | |
| (6) | The kilograms sold is offset by the grams returned during the period. |
Aurora will host a conference call today, Thursday,
May 12, 2022, 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
Conference Call Details
| DATE: | Thursday, May 12, 2022 |
| TIME: | 5:00 p.m. Eastern Time | 3:00 p.m. Mountain Time |
| WEBCAST: | Click here |
This weblink has also been posted to the Company's "Investor Info" link at https://investor.auroramj.com/ under "News &
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 adult-use brand portfolio includes Aurora Drift, San Rafael '71, Daily Special, and
Whistler, as well as CBD brands, Reliva and KG7. Medical cannabis brands include MedReleaf, CanniMed, Aurora, Whistler Medical Marijuana
Co, and Pedanios. 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. Learn more
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 includes statements containing certain
"forward-looking information" within the meaning of applicable securities law ("forward-looking statements"). Forward-looking
statements are frequently characterized by words such as "plan", "continue", "expect", "project",
"intend", "believe", "anticipate", "estimate", "may", "will", "potential",
"proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur.
Forward-looking statements made in this news release include, but are not limited to, statements with respect to:
These forward-looking statements are only predictions.
Forward looking information or statements contained in this news release have been developed based on assumptions management considers
to be reasonable. Material factors or assumptions involved in developing forward-looking statements include, without limitation, publicly
available information from governmental sources as well as from market research and industry analysis and on assumptions based on data
and knowledge of this industry which the Company believes to be reasonable. Forward-looking statements are subject to a variety of risks,
uncertainties and other factors that management believes to be relevant and reasonable in the circumstances could cause actual events,
results, level of activity, performance, prospects, opportunities or achievements to differ materially from those projected in the forward-looking
statements. These risks include, but are not limited to, the ability to retain key personnel, the ability to continue investing in infrastructure
to support growth, the ability to obtain financing on acceptable terms, the continued quality of our products, customer experience and
retention, the development of third party government and non-government consumer sales channels, management's estimates of consumer demand
in Canada and in jurisdictions where the Company exports, expectations of future results and expenses, the risk of successful integration
of acquired business and operations, management's estimation that SG&A will grow only in proportion of revenue growth, the ability
to expand and maintain distribution capabilities, the impact of competition, the general impact of financial market conditions, the yield
from cannabis growing operations, product demand, changes in prices of required commodities, competition, and the possibility for changes
in laws, rules, and regulations in the industry, epidemics, pandemics or other public health crises, including the current outbreak of
COVID-19, and other risks, uncertainties and factors set out under the heading "Risk Factors" in the Company's annual information
form dated September 27, 2021 (the "AIF") and filed with Canadian securities regulators available on the Company's issuer profile
on SEDAR at www.sedar.com and filed with and available on the SEC's website at www.sec.gov. The Company cautions that the list of risks,
uncertainties and other factors described in the AIF is not exhaustive and other factors could also adversely affect its results. Readers
are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward-looking statements and are cautioned
not to place undue reliance on such information. The Company is under no obligation, and expressly disclaims any intention or obligation,
to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly
required by applicable securities law.
This news release contains certain financial performance
measures that are not recognized or defined under IFRS (termed "Non-GAAP Measures"). As a result, this data may not be comparable
to data presented by other licensed producers of cannabis and cannabis companies. For an explanation of these measures to related comparable
financial information presented in the consolidated financial statements prepared in accordance with IFRS, refer to the discussion below.
The Company believes that these Non-GAAP Measures are useful indicators of operating performance and are specifically used by management