Full Press Release Details
Aurora Cannabis Announces Fiscal 2024 First Quarter
Results, and Delivers Record Positive Adjusted EBITDA
Achieves Quarterly Net Revenue1 of
$75.1 Million; Strong YoY Growth Across All Business Units; Global Medical Cannabis +14%, Consumer Cannabis +5%, Plant Propagation +12%
Delivers Third Sequential Quarter of Positive Adjusted EBITDA1,
Supported by Bevo's Record Quarterly Revenue
Cash Used in Operating Activities Reduced by $15.5 Million
YoY, Re-Affirms Target of Positive Free Cash Flow in Calendar Year 2024
EDMONTON, AB, Aug. 10, 2023 /CNW/ - Aurora Cannabis
Inc. (the "Company" or "Aurora") (NASDAQ: ACB) (TSX: ACB), the Canadian company opening the world to
cannabis, today announced its financial and operational results for the first quarter of fiscal year 2024. As the fiscal year 2023 consisted
of three quarters, the year-over-year comparison quarter for Q1 2024 ending June 30, 2023 is Q4 2022 ending June 30, 2022.
"We are pleased to have generated strong net
revenue1 and record adjusted EBITDA1 during Q1 which positions us well for what we believe will be a successful
fiscal year 2024," stated Mr. Martin, CEO of Aurora Cannabis. "We have built a differentiated and growing business that is diversified
across key global cannabis and non-cannabis platforms, and I am truly delighted with the strong performance across all our business units. Following
the previously announced $40 million in annualized cost efficiencies in fiscal 2024, I believe we are in a strong position to grow and
deliver profitable results to support our target of positive free cash flow," continued Mr. Martin.
First Quarter 2024 Highlights
(Unless otherwise stated, comparisons are made between fiscal Q1 2024, Q3 2023, and Q4 2022 results and are in Canadian dollars)
Consolidated Revenue and Adjusted Gross Profit:
Total net revenue1 was $75.1 million, as
compared to $50.1 million in the prior year period. The increase from the prior period is mainly due to growth in our global medical cannabis
business and a record high quarterly revenue in our plant propagation business.
Excluding the impact of the non-core bulk wholesales,
adjusted gross margin before fair value adjustments1 on cannabis net revenue1 for Q1 2024 remained strong and steady, and well
above the industry average at 53%.
Consolidated adjusted gross margin before fair value
adjustments1 was 44% in Q1 2024 (Q4 2022: 50%). Adjusted gross profit before FV adjustments1 was $32.6 million in Q1 2024
(Q4 2022: $25.8 million), an increase of 26%.
Medical cannabis net revenue1 was $41.6
million, a 14% increase from the prior year quarter, delivering 55% of Aurora's Q1 2024 consolidated net revenue[1] and 77% of Adjusted
gross profit before fair value adjustments1.
The increase in net revenue1 of $5.1M was primarily
due to 40% growth in our international business, including our European business, which benefitted from the introduction of new proprietary
high potency cultivars, and higher volumes sold to Australia, a key export market for the Company.
Adjusted gross margin before fair value adjustments1
on medical cannabis net revenue remained strong at 61% for the three months ended June 30, 2023 as compared to 67% in the prior year period
and within the Company's target range of 60% and above. The continuing positive impact of Aurora's new higher-yielding, higher-potency
cultivars, in addition to the decision to close our Nordic facility and supply the European markets from our EU GMP facilities in Canada,
are expected to further improve margins for our medical business through the remainder of this fiscal year.
Aurora's consumer cannabis net revenue1 was
$13.2 million, compared to $12.6 million in the prior year quarter, as the Company continued to introduce new and innovative cultivars
Adjusted gross margin before fair value adjustments[1] on
consumer cannabis net revenue[1] was 27%, increasing by 1% compared to the prior year quarter. The increase from the prior year quarter
is primarily driven by a mix shift in the quarter to core segment brands and recently-launched extract product innovation, and lower per
unit cost of goods sold from the consolidation of manufacturing assets.
Plant propagation net revenue1 was
wholly comprised from the Bevo business, contributing $19.9 million of net revenue1 and represents the highest
quarterly revenue for Bevo to date. The Company acquired Bevo in August 2022, and as such, there are no Bevo revenues in the comparative
period. The seasonality of the current Bevo business delivers 65-75% of its annual revenues in the first half of a calendar
year as orders are fulfilled.
Adjusted gross margin before fair value adjustments1
on plant propagation revenue was 22% for the Q1 2024 period.
Selling, General and Administrative ("SG&A"):
Adjusted SG&A1, was $29.5 million in
Q1 2024, which excludes $5.2 million of restructuring, non-recurring, and out-of-period costs. Excluding the non-routine items, Adjusted
SG&A1continue to be well controlled and in line with the Company's current target of $30 million.
Adjusted R&D1, was $1.1 million in
Q1 2024, decreasing by $0.9 million compared to the prior year quarter. The decrease from the prior year quarter relates primarily to a more targeted and
gated approach to product innovation.
Net loss for the three months ended June 30, 2023
was $28.3 million compared to $618.8 million in the prior year quarter. The decrease in net loss of $590.4 million from the same period
in the prior year was primarily due to a decrease in other expenses of $552.3 million, primarily consisting of (i) a decrease of $457.5
million in impairment of intangible assets and goodwill, (ii) a decrease of $78.7 million in impairment of property, plant and equipment,
(iii) an increase in gross profit of $17.9 million, and (iv) lower operating expenses of $26.1 million.
Adjusted EBITDA1 was $2.2 million for the
three months ended June 30, 2023, as compared to a loss of $8.8 million in the prior year quarter. The significant improvement in Adjusted
EBITDA is largely attributable to reductions in SG&A, and to growing revenue across all business units including the contribution
from the acquisition of Bevo.
Fiscal 2024 Expectations:
The Company expects cannabis net revenue1 to be largely
similar to fiscal Q1 2024, with the geographical mix slightly weighted further towards the international medical segment.
For plant propagation, we expect to see seasonally reduced revenues
and gross profit in Q2 2024 that will be in line with historical performance as 25% - 35% of revenues are normally earned in the
second half of a calendar year.
Through the remainder of fiscal 2024
Aurora is now realizing the benefit of its long-term commitment
to science and quality cultivation in that demand for the Company's products globally is beginning to outpace supply. Aurora is focused
on growing profitable revenue across all business units, but in particular to fully supply the growing demand now evident in Aurora's
international medical business as the Company's leading new cultivars have been introduced to our international channels.
In plant propagation, in addition to the normal seasonal cadence
of the base business, the Company expects first sales of orchids from the 800,000 sq ft Sky facility to occur in Q3 of this fiscal year
and for the 1.6 million sq ft Aurora Sun facility to be contributing to the top line at the start of the next fiscal year.
Aurora's achievement of significant and sustainable
operating cost and SG&A reductions has now resulted in three consecutive quarters with positive Adjusted EBITDA. This has paved the
path towards positive free cashflow in calendar year 2024.
Convertible Senior Notes
During the three months ended June 30, 2023, the Company
repurchased approximately U.S$57.0 million aggregate principal amount of convertible senior notes, at a 2.3% average discount to par value,
for aggregate cash consideration of approximately U.S$46.0 million and the issuance of 18,691,770 Common Shares.
Subsequent to June 30, 2023, the Company repurchased
approximately U.S$5.0 million aggregate principal amount of convertible senior notes at a 1.5% average discount to par value, with the
issuance of 10,274,950 Common Shares.
Aurora may, from time to time and subject to market
conditions, repurchase its convertible notes, including in open market purchases and privately negotiated transactions.
Key Quarterly Financial and Operating Results
| Three months ended | |||||||
| ($ thousands, except Operational Results) | June 30, 2023 | June 30, 2022 (6) | $ Change | % Change | March 31 , 2023 (6) | $ % Change Change | |
| Financial Results | |||||||
| Total net revenue (1)(2a) | $75,110 | $50,116 | $24,994 | 50 % | $64,043 | $11,067 | 17 % |
| Medical cannabis net revenue (1)(2a) | $41,615 | $36,471 | $5,144 | 14 % | $38,003 | $3,612 | 10 % |
| Consumer cannabis net revenue (1)(2a) | $13,220 | $12,638 | $582 | 5 % | $14,491 | ($1,271) | (9 %) |
| Plant propagation net revenue (1)(2a) | $19,904 | $- | $19,904 | 100 % | $10,754 | $9,150 | 85 % |
| Adjusted gross margin before FV adjustments on total net | |||||||
| revenue (2b) | 44 % | 50 % | N/A | (6 %) | 48 % | N/A | (4 %) |
| Adjusted gross margin before FV adjustments on core cannabis | |||||||
| net revenue (2b) | 53 % | 56 % | N/A | (3 %) | 51 % | N/A | 2 % |
| Adjusted gross margin before FV adjustments on medical | |||||||
| cannabis net revenue (2b) | 61 % | 67 % | N/A | (6 %) | 61 % | N/A | 0 % |
| Adjusted gross margin before FV adjustments on consumer | |||||||
| cannabis net revenue (2b) | 27 % | 26 % | N/A | 1 % | 25 % | N/A | 2 % |
| Adjusted gross margin before FV adjustments on plant | |||||||
| propagation net revenue (2b) | 22 % | - % | N/A | 22 % | 36 % | N/A | (14 %) |
| Adjusted SG&A expense (2d)(5) | $29,480 | $34,839 | ($5,359) | (15 %) | $27,902 | $1,578 | 6 % |
| Adjusted R&D expense (2d) | $1,101 | $1,991 | ($890) | (45 %) | $1,549 | ($448) | (29 %) |
| Adjusted EBITDA (2c)(5) | $2,155 | ($8,757) | $10,912 | 125 % | $1,254 | $901 | 72 % |
| Balance Sheet | |||||||
| Working capital (2e,f) | $227,312 | $614,264 | ($386,952) | (63 %) | $237,622 | ($10,310) | (4) % |
| Cannabis inventory and biological assets (3) | $100,846 | $127,836 | ($26,990) | (21 %) | $93,081 | $7,765 | 8 % |
| Total assets | $832,188 | $1,084,356 | ($252,168) | (23 %) | $926,322 | ($94,134) | (10) % |
| Operational Results - Cannabis | |||||||
| Average net selling price of dried cannabis excluding bulk sales | |||||||
| (2g) | $4.81 | $5.09 | ($0.28) | (6 %) | $4.76 | $0.05 | 1 % |
| Kilograms sold (4) | 15,682 | 13,130 | 2,552 | 19 % | 16,578 | (896) | (5) % |
| (1) | Includes the impact of actual and expected product returns and price adjustments (Q1 2024 - $0.6 million; Q3 2023 - $0.3 million; Q4 2022 - $1.8 million). | |
| (2) | 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" and "Cost of Sales and Gross Margin" section for a reconciliation of cannabis net revenue to the IFRS equivalent. | |
| b. | Refer to the "Adjusted Gross Margin" section for reconciliation to the IFRS equivalent. | |
| c. | Refer to the "Adjusted EBITDA" section for reconciliation to the IFRS equivalent. | |
| d. | Refer to the "Operating Expenses" section for reconciliation to the IFRS equivalent. | |
| e. | "Working capital" is defined as Current Assets less Current Liabilities as reported on the Company's Consolidated Statements of Financial Position. | |
| f. | Current liabilities includes the current portion of convertible debentures. As at March 31, 2023, the remaining balance of convertible debentures outstanding is included in current liabilities. | |
| g . | Net selling price of dried cannabis excluding bulk sales is comprised of revenue from dried cannabis excluding bulk sales (Q1 2024 - $39.6 million; Q3 2023 - $37.2 million; Q4 2022 - $39.0 million) less excise taxes on dried cannabis revenue excluding bulk sales (Q1 2024 - $4.2 million; Q3 2023 | |
| - $4.5 million; Q4 2022 - $5.1 million). | ||
| (3) | Represents total biological assets and inventory, exclusive of merchandise, accessories, supplies, consumables and plant propagation biological assets. | |
| (4) | The kilograms sold is offset by the grams returned during the period. | |
| (5) | Prior period comparatives were recast to include the adjustments for markets under development, business transformation costs, and non-recurring charges related to non-core bulk cannabis wholesales to be comparable to the current period presentation. | |
| (6) | Comparative information has been re-presented due to discontinued operations. |
Aurora will host a conference call today, Thursday,