- Total Cannabis Net Revenue of $70.3 Million, Excluding Provisions of
$2.7 Million, Up 11% over Q2 2020
- Medical Cannabis Net Revenue of $38.9 Million, Up 42% Versus Q2 2020, Driven by a
562% Increase in High Margin International Medical Sales
- Adjusted EBITDA Loss, excluding Provisions and
Termination Costs, of $12.1 Million
Represents an Improvement of $53.1
Million Over Q2 2020; Current Loss Triggered by Several
Decisions Expected to Boost Long-Term Profitability
- Improved Cash Use by More Than 74% Versus Q2 2020; Cash
on Hand at February 10, 2021 of
$565 Million
NYSE | TSX: ACB
EDMONTON, AB, Feb. 11, 2021 /PRNewswire/ - 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.
Consumer cannabis:
- Consumer cannabis net revenue1 was $28.6 million ($31.1
million excluding provisions), a 25% increase from the prior
year. Additionally, Aurora's consumer cannabis derivative products
net revenue increased by $1.7 million
sequentially, driven by product launches in vapes, edibles and
concentrates.
- Adjusted gross margin before fair value adjustments on consumer
cannabis net revenue1 was 27% in Q2 2021 versus 33% in
the prior year period, primarily driven by a $3.3 million increase in cost of sales due to
under-utilized capacity as a result of the scaling back production
at Aurora Sky, which is expected to partially reverse in subsequent
quarters and sales of our lower margin Daily Special value brand
which was not present in the prior comparative period.
Medical cannabis:
- Medical cannabis net revenue1 was $38.9 million ($39
million excluding provisions), a 42% increase from the prior
year period. The increase was primarily attributable to a continued
strong performance in both the international and Canadian medical
businesses. International medical sales grew by 562% over the prior
year comparative period.
- Adjusted gross margin before fair value adjustments on medical
cannabis net revenue1 was 56% in Q2 2021 versus 59% in
the prior year and prior quarter, primarily driven by the increase
in cost of sales due to the under-utilized capacity as a result of
the scaling back production at Aurora Sky.
Selling, General and Administrative ("SG&A") and
Adjusted EBITDA:
- SG&A, including Research and Development ("R&D"), was
$44.4 million in Q2 2021, down
$49.7 million or 53% from the prior
year period as a result of the Company's Business Transformation
Plan. Included in SG&A and R&D in Q2 2021 is $2.1 million of costs related to restructuring
charges, and severance and benefit costs associated with the
Business Transformation Plan. Excluding these impacts, Q2 2021
SG&A and R&D was $42.3
million.
- Adjusted EBITDA1 in Q2 2021 was a loss of
$16.8 million ($12.1 million loss excluding the increase in
revenue provisions and restructuring costs), compared to the prior
year Adjusted EBITDA loss of $69.9
million primarily driven by the substantial decrease in
SG&A and R&D expenses.
Additional Financial Information:
- Cash balance as of February 10,
2021 was approximately $565
million.
- Aurora continues to increase its operational flexibility to
improve its cashflow and better address consumer needs by reducing
production and complexity. Of the four cultivation facilities set
to close, three are now fully shuttered. Effective December 15, 2020, the Company also shuttered
operations at the Aurora Sun facility and reduced production at its
Aurora Sky facility by 75%, where it is testing new processes and
methodologies proven successful at other premium cultivation
sites.
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
- On January 14, 2021, Aurora
entered into an agreement with Great North Distributors Inc.,
Canada's first national sales
broker for legalized adult-use cannabis, to be the exclusive
representative for Aurora's Canadian cannabis retail brands. Great
North has reach across every province in Canada, including established relationships
and expertise in working with provincially-owned and operated
retailers and private retailers in Canada's cannabis industry. The agreement was
designed to significantly bolster Aurora's market position in
Canada.
- On January 26, 2021, Aurora
closed its bought deal public offering (the "Offering") of units of
the Company for total gross proceeds of US$137.9 million. The Company sold 13,200,000
Units at a price of US$10.45 per
Unit, including 1,200,000 Units sold pursuant to the exercise in
full of the underwriters' over-allotment option. BMO Capital
Markets and ATB Capital Markets acted as the bookrunners for the
Offering. The Company believes that this opportunistic financing
fits with its broader strategy to have a strong balance sheet while
maintaining maximum flexibility to invest and build towards being a
leader in global cannabinoids.
- Additionally, Allan Cleiren,
Chief Operating Officer, has decided to retire from the Company
effective March 31, 2021. The Company
would like to thank Allan for his years of dedicated service and
wish him well in his future endeavours.
Conference Call
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
|
About Aurora
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 impact of the Company's premium product focus and variable
cost model
- delivery of shareholder value
- strategic relationships, and capital expenditures, and related
benefits;
- future strategic plans;
- growth in the global consumer use cannabis market;
- expectations regarding production capacity, costs and yields;
and
- expectations regarding progress towards positive cash flow
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 judgment based
upon current information and involve a number of risks and
uncertainties, and there can be no assurance that other factors
will not affect the accuracy of such 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
availability of additional capital to complete construction
projects and facilities improvements, 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. 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.
Should one or more of these risks or uncertainties materialize,
or should underlying factors or assumptions prove incorrect, actual
results may vary materially from those described in forward looking
statements. 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.
Although the Company believes that the expectations conveyed by
the forward-looking statements are reasonable based on the
information available to the Company on the date hereof, no
assurance can be given as to future results, approvals or
achievements. Forward-looking statements contained in this press
release are expressly qualified by this cautionary statement. The
Company disclaims any duty to update any of the forward-looking
statements after the date of this Annual Information form except as
otherwise required by applicable law.
Non-GAAP Measures
The Company uses 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 to assess the financial and operational performance of
the Company. These Non-GAAP Measures include, but are not limited,
to the following:
- Cannabis net revenue represents revenue from the sale of
cannabis products, excluding excise taxes. Cannabis net revenue is
further broken down as follows:
-
- Medical cannabis net revenue represents Canadian and
international cannabis net revenue for medical cannabis sales only,
excluding wholesale bulk cannabis net revenue.
- Consumer cannabis net revenue represents cannabis net revenue
for consumer cannabis sales only.
- Wholesale bulk cannabis net revenue represents cannabis net
revenue for wholesale bulk sales only.
- Management believes the cannabis net revenue measures provide
more specific information about the net revenue purely generated
from our core cannabis business and by market type.
- Average net selling price per gram and gram equivalent is
calculated by taking cannabis net revenue divided by total grams
and grams equivalent of cannabis sold in the period. Average net
selling price per gram and gram equivalent is further broken down
as follows:
-
- Average net selling price per gram of dried cannabis represents
the average net selling price per gram for dried cannabis sales
only, excluding wholesale bulk cannabis sold in the period.
- Average net selling price per gram and gram equivalent of
consumer cannabis represents the average net selling price per gram
and gram equivalent for dried cannabis and cannabis extracts sold
in the consumer market
Management believes the average net selling price per gram or gram
equivalent measures provide more specific information about the
pricing trends over time by product and market type.
- Adjusted gross profit before FV adjustments on cannabis net
revenue represents cash gross profit and gross margin on cannabis
net revenue and is calculated by subtracting from total cannabis
net revenue (i) cost of sales, before the effects of changes in FV
of biological assets and inventory; (ii) cost of sales from
non-cannabis auxiliary support functions; and removing (iii)
depreciation in cost of sales; and (iv) cannabis inventory
impairment. Adjusted gross margin before FV adjustments on cannabis
net revenue is calculated by dividing adjusted gross profit before
FV adjustments on cannabis net revenue divided by cannabis net
revenue. Adjusted gross profit and gross margin before FV
adjustments on cannabis net revenue is further broken down as
follows:
-
- Adjusted gross profit and gross margin before FV adjustments on
medical cannabis net revenue represents adjusted gross profit and
gross margin before FV adjustments on sales generated in the
medical market only.
- Adjusted gross profit and gross margin before FV adjustments on
consumer cannabis net revenue represents adjusted gross profit and
gross margin before FV adjustments on sales generated in the
consumer market only.
- Adjusted gross profit and gross margin before FV adjustments on
wholesale bulk cannabis net revenue represents adjusted gross
profit and gross margin before FV adjustments on sales generated
from wholesale bulk cannabis only
Management believes that these measures provide useful information
to assess the profitability of our cannabis operations as it
represents the cash gross profit and margin generated from cannabis
operations and excludes the effects of non-cash FV adjustments on
inventory and biological assets, which are required by IFRS.
- Adjusted EBITDA is calculated as net income (loss) excluding
interest income (expense), accretion, income taxes, depreciation,
amortization, changes in fair value of inventory sold, changes in
fair value of biological assets, share-based compensation,
acquisition costs, foreign exchange, share of income (losses) from
investment in associates, government grant income, fair value gains
and losses on financial instruments, gains and losses on deemed
disposal, losses on disposal of assets, restructuring charges,
onerous contract provisions, and non-cash impairments of deposits,
property, plant and equipment, equity investments, intangibles,
goodwill, and other assets. Adjusted EBITDA is intended to provide
a proxy for the Company's operating cash flow and is widely used by
industry analysts to compare Aurora to its competitors, and derive
expectations of future financial performance for Aurora. Adjusted
EBITDA increases comparability between comparative companies by
eliminating variability resulting from differences in capital
structures, management decisions related to resource allocation,
and the impact of FV adjustments on biological assets and inventory
and financial instruments, which may be volatile and fluctuate
significantly from period to period.
Non-GAAP measures should be considered together with other data
prepared accordance with IFRS to enable investors to evaluate the
Company's operating results, underlying performance and prospects
in a manner similar to Aurora's management. Accordingly, these
non-GAAP measures are intended to provide additional information
and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS.
Reconciliation of Non-GAAP Measures
Net Revenue
|
Three months
ended
|
|
December 31,
2020
|
September 30
2020
|
December 31,
2019 (1)
|
Medical cannabis net
revenue
|
38,856
|
33,474
|
27,386
|
Consumer cannabis net
revenue
|
28,573
|
34,338
|
22,906
|
Wholesale bulk
cannabis net revenue
|
244
|
-
|
2,384
|
Total cannabis net
revenue
|
67,673
|
67,812
|
52,676
|
Total net
revenue
|
67,673
|
67,812
|
55,138
|
(1)
|
As a result of the
Company's divestment of its wholly owned subsidiaries ALPS and AHE,
the operations of ALPS and AHE have been presented as discontinued
operations and the Company's results have been retroactively
restated, as required. Refer to Note 11(b) of the Financial
Statements for information about the divestitures.
|
Adjusted Gross Margin
($
thousands)
|
Medical
Cannabis
|
Consumer
Cannabis
|
Wholesale bulk
Cannabis
|
Ancillary
Support
Functions
|
Total
|
Three months
ended December 31, 2020
|
|
|
|
|
|
Net
revenue
|
38,856
|
|
28,573
|
|
244
|
—
|
67,673
|
|
Cost of
sales
|
(23,946)
|
|
(25,681)
|
|
(1,017)
|
—
|
(50,644)
|
|
Gross profit
(loss) before FV adjustments
|
14,910
|
|
2,892
|
|
(773)
|
—
|
17,029
|
|
Depreciation in cost
of sales
|
6,376
|
|
4,472
|
|
29
|
—
|
10,877
|
|
Inventory impairment
in cost of sales
|
333
|
|
406
|
|
—
|
—
|
739
|
|
Adjusted gross
profit (loss) before FV adjustments
|
21,619
|
|
7,770
|
|
(744)
|
—
|
28,645
|
|
Adjusted gross
margin before FV adjustments
|
56
|
%
|
27
|
%
|
(305)%
|
—
|
42
|
%
|
|
|
|
|
|
|
|
|
|
Three months
ended September 30, 2020
|
|
|
|
|
|
|
|
|
Net
revenue
|
33,474
|
|
34,338
|
|
—
|
—
|
67,812
|
|
Cost of
sales
|
(18,150)
|
|
(25,144)
|
|
—
|
—
|
(43,294)
|
|
Gross profit
before FV adjustments
|
15,324
|
|
9,194
|
|
—
|
—
|
24,518
|
|
Depreciation
|
4,587
|
|
3,783
|
|
—
|
—
|
8,370
|
|
Adjusted gross
profit before FV adjustments
|
19,911
|
|
12,977
|
|
—
|
—
|
32,888
|
|
Adjusted gross
margin before FV adjustments
|
59
|
%
|
38
|
%
|
—
|
—
|
48
|
%
|
|
|
|
|
|
|
|
|
|
Three months
ended December 31, 2019 (1)(2)
|
|
|
|
|
|
|
|
|
Net
revenue
|
27,386
|
|
22,906
|
|
2,384
|
2,462
|
55,138
|
|
Cost of
sales
|
(14,099)
|
|
(18,129)
|
|
(1,169)
|
(3,540)
|
(36,937)
|
|
Gross profit
(loss) before FV adjustments
|
13,287
|
|
4,777
|
|
1,215
|
(1,078)
|
18,201
|
|
Depreciation
|
2,992
|
|
2,793
|
|
233
|
-
|
6,018
|
|
Adjusted gross
profit (loss) before FV adjustments
|
16,279
|
|
7,570
|
|
1,448
|
(1,078)
|
24,219
|
|
Adjusted gross
margin before FV adjustments
|
59
|
%
|
33
|
%
|
61%
|
(44)%
|
44
|
%
|
(1)
|
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.
|
(2)
|
As a result of the
Company's divestment of its wholly owned subsidiaries ALPS and AHE,
the operations of ALPS and AHE have been presented as discontinued
operations and the Company's results have been retroactively
restated, as required. Refer to Note 11(b) of the Financial
Statements for information about the divestitures.
|
Adjusted EBITDA
($
thousands)
|
December 31,
2020
|
September 30,
2020
|
December 31, 2019
(3)(4)
|
Net (loss) income
from continuing operations
|
(292,788)
|
(107,160)
|
(1,302,175)
|
Finance
costs
|
18,872
|
14,691
|
23,833
|
Interest (income)
expense
|
(1,865)
|
(1,267)
|
(1,997)
|
Income tax expense
(recovery)
|
3,167
|
611
|
(25,136)
|
Depreciation and
amortization
|
24,883
|
22,444
|
26,757
|
EBITDA
|
(247,731)
|
(70,681)
|
(1,278,718)
|
Changes in fair value
of inventory sold
|
5,942
|
3,304
|
13,223
|
Unrealized gain on
changes in fair value of biological assets
|
(6,262)
|
(5,407)
|
(7,932)
|
Share-based
compensation
|
5,987
|
6,861
|
19,694
|
Acquisition
costs
|
—
|
1,104
|
2,059
|
Foreign exchange loss
(gain)
|
527
|
(7,427)
|
961
|
Share of loss from
investment in associates
|
117
|
373
|
1,930
|
Government grant
income
|
(23,678)
|
—
|
-
|
Losses (gains) on
financial instruments (1)
|
17,309
|
7,366
|
166,877
|
Losses (gains) on
deemed disposal of significant influence investment
|
—
|
1,443
|
-
|
Gains (losses) on
disposal of assets held for sale and property, plant, and
equipment
|
(3,317)
|
922
|
-
|
Restructuring
charges
|
—
|
210
|
-
|
Onerous contract
provision
|
2,000
|
—
|
-
|
Impairment of
deposits, inventory, investment in associate,
property, plant and equipment, intangibles, and goodwill
|
232,304
|
4,041
|
1,012,049
|
Adjusted EBITDA
(2)
|
(16,802)
|
(57,891)
|
(69,857)
|
(1)
|
Includes fair value
changes on derivative investments, derivative liability, contingent
consideration, and (gain) loss on the modification of debt. Refer
to Note 20 of the Financial Statements.
|
(2)
|
Adjusted EBITDA is a
non-GAAP financial measure and is not a recognized, defined, or
standardized measure under IFRS. Refer to "Cautionary Statement
Regarding Certain Non-GAAP Performance Measures" section of the
MD&A.
|
(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.
|
(4)
|
As a result of the
Company's divestment of its wholly owned subsidiaries ALPS and AHE,
the operations of ALPS and AHE have been presented as discontinued
operations and the Company's results have been retroactively
restated, as required. Refer to Note 11(b) of the Financial
Statements for information about the divestitures.
|
Included in the three months ended December 31, 2020 Adjusted EBITDA loss is
$0.8 (three months ended September 30, 2020 - $43.3
million) legal settlement and contract termination fees and
$2.1 million (three months ended
September 30, 2020 - $4.1 million) related restructuring charges,
severance and benefits associated with the business transformation
plan. Excluding these impacts, Adjusted EBITDA loss is $13.9 million (three months ended September 30, 2020 - $10.5
million).
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SOURCE Aurora Cannabis Inc.