Aurora Cannabis (TSX: ACB) (NYSE: ACB) this evening posted its third quarter 2021 financial results, with results falling far short of analyst expectations. The company recognized just $55.2 million in net revenue for the quarter, a decline of 18% on a quarter over quarter basis.
Revenue for the period failed to meet consensus estimates, with the company having been expected to post $68.94 million in net revenue based on 12 analyst estimates. Notably, the company failed to meet even the lowest expectation of $60.0 million in net revenues. And things just went downhill from here.
Cost of sales for the quarter amounted to an astounding $127.5 million, or roughly $2.31 for every $1.00 of net revenue. $88.0 million of that cost of sales is related to inventory impairment due to either being either “lower potency or excess inventory.” The result is a negative gross profit of $72.4 million before fair value adjustments.
Moving to operating expenses, the company saw $57.5 million worth of expenses for the three month period, the largest being general and administrative expenses of $28.5 million, followed by sales and marketing expenditures of $13.2 million. The resulting loss from operations came in at $143.0 million.
Other expenses pushed the losses for the quarter even higher, with the company recording $17.0 million in financing costs, as well as $2.2 million in legal settlement and contract termination fees. A further $4.5 million was recorded as impairments of property, plant and equipment. Losses here were reduced slightly as a result of other gains of $8.3 million.
In total, Aurora Cannabis recognized a net loss of $164.7 million, while recording adjusted EBITDA of negative $24.0 million.
The company this evening also announced that it is planning to accelerate $60 million to $80 million in annualized cost efficiencies. Efficiencies are to be realized over the next twelve to eighteen months, with contributions consisting of $40 to $60 million in cost of goods sold, and $20 million in SG&A.
In the meantime, to further bolster its cash position of $470.2 million, the company has indicated that it intends to file a prospectus for a US$300 million at the market financing. The financing is to be used for “maximum flexibility” and reportedly will not be accessed “without an accretive use of proceeds.”
Finally, the company announced that as of May 24, 2021, it will see its US big board listing transition from the NYSE to the Nasdaq as the company looks to cut listing costs.
Aurora Cannabis last traded at $8.93 on the TSX.
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.