Auxly Cannabis Reports Q4 Revenues Of $18.9 Million, Net Loss Of $27.2 Million

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.

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