Auxly Cannabis (TSX: XLY) this morning posted its fourth quarter and full year 2020 financial results, reporting net revenues of $18.9 million for the quarter along with a net loss of $27.2 million. For the full fiscal year, the company reported net revenues of $50.8 million along with a total net loss of $87.4 million. The company also revealed that a joint venture has defaulted on its loans, for which the company has provided certain guarantees for.
Revenues were up significantly on a quarter over quarter basis, climbing 40.4% from $13.4 million in the third quarter to $18.9 million in the second quarter. Net losses also increased however, with the $17.8 million loss posted in the third quarter climbing to $27.2 million in the fourth quarter.
Operations however are still far from profitability, with the company recording cost of goods sold for the quarter of $15.6 million, along with inventory impairments of $1.8 million, resulting in a gross profit of $1.7 million for the quarter. Expenses meanwhile came in at $15.9 million, with the largest being selling, general and administrative at $9.8 million, followed by interest expenses of $3.8 million.
Additional losses taken during the quarter included a $2.0 million impairment on long term assets, a $6.2 million loss on the settlements, a $4.4 million share of loss on investment in joint venture, and foreign other losses of $0.6 million, culminating in a net loss of $27.2 million for the quarter.
Looking to the balance sheet, the company saw its cash and cash equivalents grow from $13.6 million in the third quarter to $21.2 million in the fourth, while receivables improved marginally from $10.4 million to $10.7 million. Inventory was also up, climbing from $41.3 million to $43.8 million. Total current assets overall grew from $83.5 million to $90.4 million.
Accounts payable meanwhile declined from $29.0 million to $27.2 million over the quarter, while interest payable climbed from $5.1 million to $6.6 million. Short term debt fell marginally from $3.7 million to $3.3 million, while deferred revenue climbed from $5.5 million to $5.7 million. Overall, total current liabilities declined from $46.0 million to $44.2 million.
Outside of the reported financials, the company revealed that on April 16, 2021, Sunens, its joint venture, has received a notice of default from the Bank of Montreal under an outstanding credit agreement. The failure is a result of the company not hitting certain revenue milestones in the first quarter. The default is significant for Auxly, whom has guaranteed up to $33.0 million in payments in the event of such a default
Auxly Cannabis last traded at $0.365 on the TSX.
Information for this briefing was found via Sedar and Auxly Cannabis Group Inc. The author has no 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.