Full Press Release Details
Aurora Cannabis Announces Fiscal 2024 Second
Quarter Results and Delivers Record Positive Adjusted EBITDA
EDMONTON, AB, Nov. 9, 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 second quarter of fiscal year 2024. As the fiscal year 2023 consisted
of three quarters, the year-over-year comparison quarter for Q2 2024 ending September 30, 2023, is Q1 2023 ending September 30, 2022.
"This is our strongest fiscal year to date, led
by robust net revenue1 growth in our high-margin medical cannabis segment, coupled with positive adjusted EBITDA1 for
the fourth consecutive quarter," stated Miguel Martin, Chief Executive Officer of Aurora. "We are experiencing the benefits
of diversification across our cannabis and non-cannabis platforms characterized by stability in Canada, record revenue in Europe and Australia,
and early success with our most recent acquisition, Bevo Farms."
Mr. Martin continued, "We are also proceeding
with capturing $40 million in annualized cost efficiencies during fiscal 2024, in addition to the approximate $400 million savings we
delivered over the last three years. By executing on our plan to deliver top-line growth and increased profitability, we are moving closer
to reaching our target of positive free cash flow in calendar year 2024."
Mr. Martin added, "Our balance sheet is in a
strong net cash position to pursue profitable growth opportunities through M&A, and we will repay the remainder of our US$5.3million
of convertible senior notes in February 2024. The combination of industry leading margins, a strong balance sheet and a proven track record
of execution, point to Aurora's best days laying squarely ahead."
Second Quarter 2024 Highlights
(Unless otherwise stated, comparisons are made between fiscal Q2 2024, Q1 2024, and Q1 2023 results and are in Canadian dollars)
Consolidated Revenue and Adjusted Gross Profit:
Total net revenue1 was $63.4 million, as compared to $48.6 million in the prior year period. The increase from
the prior period is mainly due to growth in our global medical cannabis business and quarterly revenue in our plant propagation business.
Excluding the impact of the non-core bulk wholesale,
adjusted gross margin before fair value adjustments1 on cannabis net revenue1 for Q2 2024 remained strong and steady, and well
above the industry average at 55%.
Consolidated adjusted gross margin before fair value
adjustments1 was 51% in Q2 2024 (Q1 2023: 51%). Adjusted gross profit before FV adjustments1 was $32.1 million in Q2 2024
(Q1 2023: $24.3 million), an increase of 32%.
Medical cannabis net revenue1 was $43.8 million, a 42% increase from the prior year quarter, delivering 69% of Aurora's
Q2 2024 consolidated net revenue[1] and 85% of Adjusted gross profit before fair value adjustments1.
The increase in net revenue1 of $12.8 million
was primarily due to growth in 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 63% for the three months ended September 30, 2023, as compared to 68% 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 $12.0 million, compared to $13.7 million in the prior year quarter.
The change is partially due to the exit from the US CBD business, as well as a refocus on supporting premium categories and the timing
of new innovation launches.
Adjusted gross margin before fair value adjustments1
on consumer cannabis net revenue1 was 27%, increasing by 2% compared to the prior year quarter. The sequential increase is
largely due to higher efficiency in production operations and product sales with higher margins relative to the comparative prior periods.
Plant propagation net revenue1 was wholly comprised from the Bevo business, contributing $7.2 million of net revenue1. 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
Adjusted gross margin before fair value adjustments1
on plant propagation revenue was 22% for the Q2 2024 period.
Selling, General and Administrative ("SG&A"):
Adjusted SG&A1 was $27.7 million in Q2 2024, which excludes $7.6 million of restructuring, non-recurring, and out-of-period
costs. Adjusted SG&A1continue to be well controlled and in line with the Company's current target of $30 million.
Adjusted R&D1, was $0.9 million in
Q2 2024, which is relatively consistent as compared to the prior year quarter.
Net income from continuing operations for the three months ended September 30, 2023 was $0.3 million compared to a net loss of
$45.5 million for the same period in the prior year. The decrease in net loss of $45.7 million from the comparative prior year quarter
was primarily attributable to an increase in gross profit of $33.5 million, an increase in other income of $19.1 million, and a
decrease in G&A expense of $6.1 million.
Adjusted EBITDA1 was $3.4 million for the three months ended September 30, 2023, as compared to a loss of $6.2 million
in the prior year quarter. The significant improvement in Adjusted EBITDA is primarily attributable to higher adjusted gross profits before
fair value adjustments of $7.7 million, and reduction in adjusted SG&A and R&D expenses of $2.1 million.
Fiscal Q3 2024 Expectations:
Aurora's achievement of significant and sustainable
operating cost and SG&A reductions has now resulted in four consecutive quarters with positive Adjusted EBITDA. This has paved the
path towards positive free cashflow in calendar year 2024.
During the three months ended September 30, 2023,
the Company settled approximately $41.2 million (US$30.5 million) aggregate principal amount of convertible senior notes, with the issuance
of 53,901,522 Common Shares.
Subsequent to September 30, 2023, the Company repurchased
approximately $23.1 million (US$17.0 million) aggregate principal amount of convertible senior notes, for aggregate consideration, including
accrued interest, of approximately $23.2 million (US$17.1 million). The remaining convertible debenture balance as of the date hereof
is approximately $7.3 million (US$5.3 million) and is expected to be settled at or prior to maturity.
Key Quarterly Financial and Operating Results
| ($ thousands, except Operational Results) | Three months ended | ||||||
| September 30, 2023 | September 30, 2022 (6) | $ Change | % Change | June 30, 2023 (6) | $ Change | % Change | |
| Financial Results | |||||||
| Total net revenue (1)(2a) | $63,418 | $48,648 | $14,770 | 30 % | $75,033 | ($11,615) | (15 %) |
| Medical cannabis net revenue (1)(2a) | $43,816 | $30,950 | $12,866 | 42 % | $41,615 | $2,201 | 5 % |
| Consumer cannabis net revenue (1)(2a) | $11,959 | $13,713 | ($1,754) | (13 %) | $13,143 | ($1,184) | (9 %) |
| Plant propagation net revenue (1)(2a) | $7,154 | $3,297 | $3,857 | 100 % | $19,904 | ($12,750) | (64 %) |
| Adjusted gross margin before FV adjustments on total net revenue (2b) | 51 % | 51 % | N/A | 0 % | 44 % | N/A | 7 % |
| Adjusted gross margin before FV adjustments on core cannabis net revenue (2b) | 55 % | 55 % | N/A | 0 % | 53 % | N/A | 2 % |
| Adjusted gross margin before FV adjustments on medical cannabis net revenue (2b) | 63 % | 68 % | N/A | (5 %) | 61 % | N/A | 2 % |
| Adjusted gross margin before FV adjustments on consumer cannabis net revenue (2b) | 27 % | 25 % | N/A | 2 % | 28 % | N/A | (1 %) |
| Adjusted gross margin before FV adjustments on plant propagation net revenue (2b) | 22 % | 16 % | N/A | 6 % | 22 % | N/A | 0 % |
| Adjusted SG&A expense (2d)(5) | $27,742 | $29,816 | ($2,074) | (7 %) | $29,038 | ($1,296) | (4 %) |
| Adjusted R&D expense (2d) | $946 | $984 | ($38) | (4 %) | $1,101 | ($155) | (14 %) |
| Adjusted EBITDA (2c)(5) | $3,398 | ($6,168) | $9,566 | 155 % | $2,724 | $674 | 25 % |
| Balance Sheet | |||||||
| Working capital (2e,f) | $270,009 | $514,193 | ($244,184) | (47 %) | $227,312 | $42,697 | 19 % |
| Cannabis inventory and biological assets (3) | $114,781 | $121,776 | ($6,995) | (6 %) | $100,846 | $13,935 | 14 % |
| Total assets | $818,579 | $1,169,927 | ($351,348) | (30 %) | $832,188 | ($13,609) | (2) % |
| Operational Results - Cannabis | |||||||
| Average net selling price of dried cannabis excluding bulk sales (2g) | $4.75 | $5.21 | ($0.46) | (9 %) | $4.80 | ($0.05) | (1) % |
| Kilograms sold (4) | 13,582 | 12,165 | 1,417 | 12 % | 15,682 | (2,100) | (13) % |
| (1) | Includes the impact of actual and expected product returns and price adjustments (Q2 2024 - $ - million; Q1 2024 - $0.6 million; Q2 2023 - $0.7 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: | |
| (1) | Refer to the "Revenue" and "Cost of Sales and Gross Margin" section for a reconciliation of cannabis net revenue to the IFRS equivalent. | |
| (2) | Refer to the "Adjusted Gross Margin" section for reconciliation to the IFRS equivalent. | |
| a. | Refer to the "Adjusted EBITDA" section for reconciliation to the IFRS equivalent. | |
| b. | Refer to the "Operating Expenses" section for reconciliation to the IFRS equivalent. | |
| c. | "Working capital" is defined as Current Assets less Current Liabilities as reported on the Company's Consolidated Statements of Financial Position. | |
| d. | 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. | |
| e. | Net selling price of dried cannabis excluding bulk sales is comprised of revenue from dried cannabis excluding bulk sales (Q2 2024 - $43.1 million; Q1 2024 - $39.5 million; Q2 2023 - $33.1 million) less excise taxes on dried cannabis revenue excluding bulk sales (Q2 2024 - $4.9 million; Q1 2024 - $4.2 million; Q2 2023 - $4.4 million). | |
| 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 (Q2 2024 - $43.1 million; Q1 2024 - $39.5 million; Q2 2023 - $33.1 million) less excise taxes on dried cannabis revenue excluding bulk sales (Q2 2024 - $4.9 million; Q1 2024 - $4.2 million; Q2 2023 - $4.4 million). | |
| (3) | Represents total biological assets and inventory, exclusive of merchandise, accessories, supplies, consumables and plant propagation biological assets. | |
| (4) | The kilograms sold, net of returns 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,
November 9, 2023, 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, November 9, 2023 |
| TIME: | 5:00 p.m. Eastern Time | 3:00 p.m. Mountain Time |
| WEBCAST: | Click Herehttps://protect-us.mimecast.com/s/yaOjCkRwrpI30Vn9iQjK5A?domain=viavid.webcasts.com |
This weblink has also been posted to the Company's
"Investor Info" link at https://auroramj.com/investors under "Events".
Aurora is opening the world to cannabis, 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, Tasty's, Whistler,
Being and Greybeard. Medical cannabis brands include MedReleaf, CanniMed, Aurora and Whistler Medical Marijuana Co, as well as international
brands, Pedanios, Bidiol and CraftPlant. Aurora also has a controlling interest in Bevo Farms Ltd., North America's leading supplier of
propagated agricultural plants. 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.
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 statements regarding pro forma measures including revenue, cash flow, Adjusted
gross margin before fair value adjustments, and expected SG&A run-rates; ongoing cost efficiencies and the Company's path and timing
to achieve positive free cash flow; the Company's ability to deliver profitable results and pursue profitable growth opportunities through
M statements under the heading "Fiscal 2024 Expectations" including, but not limited to, those with respect to cannabis