Aurora Cannabis (TSX: ACB) (NYSE: ACB) reported its fourth quarter financial results for the period ended June 30, 2020 this evening, reporting fourth quarter revenues of $72.1 million, a 5% decline from the prior quarter, along with a net loss of $1.9 billion for the quarter. Looking at the full fiscal year, the company reported net revenues of $278.9 million, along with a net loss of $3.31 billion, or a loss of an astounding $33.94 per share.
While full financials have yet to be published by Aurora, select information has been provided ahead of the firms fourth quarter conference call. With revenues coming in at $72.1 million for the quarter, the breakdown is said to consist of $35.3 million in consumer cannabis net revenue and $32.2 million in medical cannabis net revenues.
Revenues from consumer cannabis fell 9% on a quarter over quarter basis, while total volume sold increased by 36%, a function of becoming a value brand within the space. Total cannabis produced meanwhile increased to 44,406 kilograms from 36,207 kilograms in the prior period.
The company highlights that the cash cost to produce each gram has fallen to $0.89 per gram from $1.22 in the prior period as well, however this is all for naught considering the company managed to sell only 16,748 kilograms of cannabis during the quarter, or roughly 37.7% of what was produced – meaning the company continues to waste precious dollars on producing product it simply cannot sell due to demand factors.
Gross margin during the quarter meanwhile was -$79.96 million, a function of the company having to write off millions of dollars worth of “cost of sales” inventory during the quarter to the tune of $105.5 million. This was before the company recorded SG&A expenses during the quarter of $60.1 million, and R&D expenses of $7.6 million, indicating that the company still has no semblance of profitability.
Further “balance sheet adjustments” as the company refers to impairments include a fixed asset impairment charge of $86.5 million, a $29.6 million impairment to the fair value of inventory, and a non-cash impairment of $1.6 billion to goodwill and intangible assets.
Looking towards the cash position of Aurora, the company managed to burn through $149.9 million over the course of the quarter, while simultaneously raising $81.9 million. The end result, is a cash position of $162.2 million as of June 30, while also identifying that the company may be in trouble if the taps to further cash are turned off.
The rest of the balance sheet is not much rosier, with accounts receivable falling from $80.3 million to $54.1 million over the quarter. Inventory meanwhile tumbled from $251.2 million to $121.8 million, while biological assets climbed from $30.6 million to $35.4 million. Total current assets overall fell from $654.2 million to $420.7 million, while total assets were obliterated, tanking from $4.72 billion to $2.78 billion over the three month period thanks to numerous impairments.
Things look slightly better on the other side of the balance sheet, with accounts payable falling from $128.6 million to $95.6 million. Loans and borrowings however climbed from $21.8 million to $120.5 million. Total current liabilities climbed from $206.4 million to $272.8 million. The bright side for the company here is that total liabilities overall fell from $819.4 million to $657.2 million during the quarter.
Lastly, Aurora Cannabis provided guidance for its first quarter FY2021 results, with net revenues expected to come in between $60 and $64 million, with revenue expected to be only from that of cannabis net revenue. This represents a further quarterly decline in revenues, while gross margins are expected to be between 46% and 50%, and SG&A costs are expected to be in “the low $40 million range.”
The company continues to forecast that it will be adjusted EBITDA positive in the second quarter of 2021.
Aurora Cannabis last traded at $6.59 on the NYSE in after hours trading.
Information for this briefing was found via Sedar and Aurora Cannabis. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.