TSXV:ACB
Strong Revenue Growth, Increased Revenue per
Patient
Construction of Aurora Sky Proceeding on
Schedule
VANCOUVER, May 15, 2017 /CNW/ - Aurora Cannabis Inc.
(the "Company" or "Aurora") (TSXV: ACB) (OTCQX: ACBFF)
(Frankfurt: 21P; WKN: A1C4WM)
today announced its financial and operational results for the
quarter ended March 31, 2017 (Q3
2017).
Operational Highlights and Recent Developments
Revenues of $5.2 million as
compared to $0.2 million for Q3 2016.
Q3 2017 revenues reflect 33.3% sequential growth over Q2 2017,
driven both by increased patient numbers and higher revenue per
patient. The Company's current sales pace exceeds $2.0 million per month. Aurora continues to
execute well on all aspects of its growth strategy, including the
construction of a state-of-the-art 800,000 square foot production
facility, national and international expansion, and continued
investments in technology, innovation, partnerships, customer
service, and sales and marketing.
Financial and operational highlights Q3 2017
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Q3 2017
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Q2 2017
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Change
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Q3 2016
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Change
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Active registered
patients at close of period1
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13,110
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12,200
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7.4%
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1,042
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1,158%
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Grams sold
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653,008
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538,045
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21.4%
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30,380
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2,049%
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Revenues
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$5.2 M
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$3.9 M
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33.3%
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$0.2 M
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2,500%
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Adjusted gross profit
2
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$3.1 M
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$1.5 M
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106.7%
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-
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-
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Working
capital
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$126.5 M
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$60.1 M
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110.4%
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$2.4 M
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5,171%
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Investment in capital
assets
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$10.5 M
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$4.2 M
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150.0%
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$1.6 M
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556%
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(1)
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As of the date
hereof, the Company has approximately 13,600 active registered
patients
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(2)
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Adjusted gross profit
is a non GAAP financial measure that does not have a standardized
meaning under IFRS and may not be comparable to other
companies. See reconciliation later in this document.
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Developments subsequent to the quarter
- Achieved sales pace exceeding $2
million in gross monthly revenues.
- Commenced sales of cannabis oils.
- Construction of Aurora Sky, the Company's flagship new 800,000
square foot production facility at the Edmonton International Airport, is proceeding
well and on schedule. The Company currently estimates the capital
cost of the project to be in the range of $110 million.
- Production at the new facility is expected to commence late in
calendar 2017 upon completion of the initial phases of the project,
with the full 800,000 square feet completed in 2018 and full
capacity reached in 2019.
- Further strengthened its financial position with completion of
the $75 million 7% unsecured
convertible debentures offering, and converted $17,500,000 of outstanding 8% convertible
debentures into approximately 8,750,000 additional common
shares.
- Completed the acquisition of Peloton Pharmaceuticals Inc.,
which includes a 40,000-square foot cannabis production facility in
Pointe-Claire, Quebec, currently
80% complete. Subsequent to the acquisition, Aurora has
re-initiated construction activities towards completion and
licensing.
- Commenced international expansion with the participation in
Cann Group Limited's initial public offering on the Australian
Stock Exchange (ASX: CAN) for A$6.5
million, and now holds 19.9% of the shares issued and
outstanding in Australia's first
licensed cannabis company.
- Approximately $86.5 million in
additional gross cash proceeds may be available from the potential
future exercise of warrants, stock options and compensation
options/warrants.
- Completed phase II of the research collaboration with Radient
Technologies Inc. ("RTI"), and a report is expected from RTI,
subject to confirmation of analytical results from Anandia Labs, by
May 31, 2017.
- Appointed Glen Ibbott as Chief
Financial Officer.
- Appointed Andrea Paine as
Director, Québec Affairs.
Management commentary
"The tabling this spring of legislation to legalize adult
consumer use of cannabis validates our aggressive growth and
expansion strategy," said Terry Booth, CEO. "The progress of
construction and timelines to complete our 800,000 square foot
Aurora Sky facility position us exceptionally well for the
anticipated start of adult consumer sales by July 2018."
Booth continued, "Our premium cannabis products continue to
resonate strongly with the rapidly growing medical market.
Following an exceptional patient growth rate for the first twelve
months of commercial operations, demand continues to exceed
available supply. We have pro-actively managed new patient
registrations in Q3 2017 to balance demand with our steadily
increasing production capacity to ensure we protect our position as
a premium supplier. As our capacity increases and more product
becomes consistently available, we anticipate patient acquisition
will resume its steady growth. We are also very excited to have
commenced cannabis oil sales shortly after the quarter ended. They
have gotten off to a brisk start, and we expect these to be a
material contributor to revenues, enabling us to capture
significant share in this fast growing segment of the cannabis
market."
Booth concluded, "Going forward, with one of the strongest cash
balances in the industry, we will be able to execute on our
aggressive expansion plans, both domestically and internationally,
as we have done successfully with the acquisition of Peloton and
our participation in the IPO of Australia's first licensed cannabis company,
Cann Group. Finally, as we are maturing as an organization, we have
added considerable strength to the management team with the
appointments of a CFO and Director of Québec Affairs. These new
team members will add important additional senior executive
capacity as we pursue our goals and execute our growth
strategy."
Highlights Q3 2017
- Obtained cannabis oil sales license in January 2017.
- Significantly strengthened the balance sheet with in total
$127.4 in new funds:
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- Generated approximately $27.4
million from the exercise of warrants, stock options and
compensation options.
- $25 million in completed brokered
private placement of 8% unsecured convertible debentures.
- $75 million in completed brokered
private placement of 33,337,500 units at a price of $2.25 per unit.
- Generated revenues of approximately $5.2
million, up 33%, or approximately $1.3 million, from Q2 2017;
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- Sold 653,008 grams of cannabis, up 21% from Q2 2017.
- Achieved new sales milestones.
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- Sales pace for the quarter in excess of $1.5 million per month.
- Record sales month in March 2017
with product sales in excess of 250 kilograms and gross revenue in
excess of $2 million.
- Launched second generation of the Company's highly successful
mobile application.
- Graduated from the OTCQB to the OTCQX.
- Signed a Memorandum of Understanding with Radient Technologies
Inc. ("Radient") for a joint development and commercialization of
superior and standardized cannabinoid extracts. Entered into a
joint venture research agreement pursuant to which Radient and
Aurora are working to validate the effectiveness of Radient's MAP
technology for cannabis extraction.
- Invested approximately $3.3
million in Radient's convertible debenture and private
placement financings, resulting in an 18% ownership
- Appointed Neil Belot as Chief
Global Business Development Officer.
- Appointed Dr. Barry Waisglass as
Medical Director.
Financial review Q3 2017
A comprehensive discussion of Aurora's financials and operations
are provided in the Company's Management Discussion & Analysis
and Financial Statements filed with SEDAR and can be found on
www.sedar.com.
Revenues
The Company sold 653,008 grams of cannabis during Q3 2017, up
21% from Q2 2017. Revenues of $5.2
million were generated in Q3 2017, as compared to
$0.2 million for Q3 2016, and up 33%,
or approximately $1.3 million, from
Q2 2017, driven by higher patient numbers and an increase in the
revenue per patient. The Company has pro-actively managed new
patient registrations in Q3 2017, following an exceptional patient
growth rate for the first twelve months of commercial operations,
in order to balance demand with its steadily increasing production
capacity, and to protect the Company's reputation as a reliable
supplier of premium products. As more product becomes available,
the Company anticipates it will increase new patient registration
and return to higher patient acquisition rates.
Gross Profit and Adjusted Gross Profit
Management believes that "Adjusted Gross Profit", a non GAAP
measure, provides useful insight into the Company's operational
performance during the periods by excluding non-cash fair value
measurements of biological assets that are required under IFRS, as
follows:
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Three months
ended
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Three months
ended
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March 31,
2017
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March 31,
2016
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$
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$
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Revenue, as reported
under IFRS
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5,175,304
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219,230
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Gross Profit, as
reported under IFRS
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5,762,624
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4,191,186
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Unrealized gain on
changes in FV of biological assets
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2,620,160
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4,808,248
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Adjusted Gross
Profit
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3,142,464
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(617,062)
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Adjusted Gross Profit
Margin
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61%
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N/A
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General & Administrative Costs
General and administration costs were $2.0 million in Q3 2017, an increase of
$1.4 million compared to Q3 2016,
attributable primarily to increases in corporate and general
administrative activities as the Company scaled up its business
operations, completed various equity and debt financings, as well
as other costs incurred related to ongoing negotiations for
additional financings and other potential acquisition and
investment opportunities. In the prior period, the Company began
scaling up its business operations as it transitioned to a fully
licensed producer.
Sales & Marketing
Sales and marketing costs were $2.7
million in Q3 2017, an increase of $2.2 million over Q3 2016. The increase was
largely attributable to increases in consulting fees, selling costs
and wages. Consulting fees increased by $1.0
million, primarily attributable to fees paid to Canadian
Cannabis Clinics pursuant to a services agreement to provide
operational, administrative and consulting services to CanvasRx. No
such expense was incurred in the prior period. Selling expenses
increased by $0.8 million, directly
related to the increase in sales volume during the period.
Net Income
The Company recorded net income of $0.1
million in Q3 2017, as compared to net income of
$2.5 million in Q3 2016. The change
in net income is attributable primarily to a $5.0 million increase in revenues, and a
$3.3 million increase in the
unrealized gain on debenture and marketable securities, offset by a
$2.2 million negative impact of the
change in unrealized gain on the changes in fair value of
biological assets, a $2.5 million
increase in non-cash share-based payments, a $1.1 million increase in financing costs, as well
as a $3.5 million increase in Sales
& Marketing and General & Administrative costs, related to
the increase in business and corporate activities.
Liquidity and Capital Resources
Working capital as of March 31,
2017 was $126.5 million, as
compared to a deficiency of $2.8
million as
at June 30, 2016. The $129.3 million increase was primarily
attributable to an increase in cash and cash equivalents of
$110.9 million, generated from debt
and equity financings, offset by a decrease in short term loans of
$6.0 million. The increase in cash
and cash equivalents resulted mainly from net cash generated from
equity and debt financings of $147.1
million, offset by net cash used for operations of
$15.2 million and investments of
$21.0 million.
Subsequent to March 31, 2017, the
Company also generated $75 million in
additional gross cash proceeds from an unsecured convertible
debenture financing.
Details of the capital initiatives described above can be found
in the Company's filings on www.sedar.com
Outstanding Share Data
As of the date of the MD&A, the Company had the following
securities issued and outstanding:
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Securities
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May 15, 2017
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#
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Issued &
Outstanding Shares
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355,172,810
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Options
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15,547,396
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Warrants
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24,488,375
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Compensation
options/warrants
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1,865,249
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Charitable
options
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72,000
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Convertible
debentures shares reserved for issuance
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25,153,352
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Outlook
Aurora's business strategy is to continue accelerating its
penetration of the Canadian medical cannabis market, leverage its
Health Canada sales license for derivative products, expedite the
completion of the Pointe-Claire
facility, and to complete a major facility expansion (Aurora Sky)
for additional production capacity.
If, as expected, the Canadian federal government passes
legislation legalizing the adult consumer use of cannabis, the
Company is building organizational and production capacity to
capture a share of the adult use market. The Company is
executing an aggressive Canadian and international expansion, as
evidenced by the April 2017
acquisition of Peloton Pharmaceuticals in Québec, and lead
participation in the May 2017 Cann
Group IPO in Australia. The Company is also actively pursuing
further international opportunities.
CanvasRx Share Issuance
Additionally, the Company shall issue 1,080,604 Common
Shares, at a deemed price of $2.30
per Common Share, to the vendors of CanvasRx Inc. ("CanvasRx") in
accordance with CanvasRx achieving certain earn-out payment
milestones for the period ended March 31,
2017, as set out in the share purchase agreement previously
announced on August 10, 2016. The
issuance shall be completed upon receipt of approval from the TSX
Venture Exchange, which is expected to occur shortly.
About Aurora
Aurora's wholly-owned subsidiary, Aurora Cannabis Enterprises
Inc., is a licensed producer of medical cannabis pursuant to Health
Canada's Access to Cannabis for Medical Purposes Regulations
("ACMPR"). The Company operates a 55,200 square foot,
state-of-the-art production facility in Mountain View County,
Alberta, and is currently
constructing a second 800,000 square foot production facility,
known as "Aurora Sky", at the Edmonton International Airport, and has
acquired, and is undertaking completion of, a third 40,000 square
foot production facility in Pointe-Claire, Quebec, on Montreal's West Island. In
addition, the company is the cornerstone investor with a 19.9%
stake in Cann Group Limited, the first Australian company licensed
to conduct research on and cultivate medical
cannabis. Aurora's common shares trade on the TSX-V under the
symbol "ACB".
On behalf of the Board of Directors, AURORA CANNABIS INC.
Terry Booth, CEO
This news release includes statements containing certain
"forward-looking information" within the meaning of applicable
securities law ("forward-looking statements"). Forward-looking
statements are frequently characterized by words such as "plan",
"continue", "expect", "project", "intend", "believe", "anticipate",
"estimate", "may", "will", "potential", "proposed" and other
similar words, or statements that certain events or conditions
"may" or "will" occur. These statements are only predictions.
Various assumptions were used in drawing the conclusions or making
the projections contained in the forward-looking statements
throughout this news release. Forward-looking statements are based
on the opinions and estimates of management at the date the
statements are made, and are subject to a variety of risks and
uncertainties and other factors that could cause actual events or
results to differ materially from those projected in the
forward-looking statements. The Company is under no obligation, and
expressly disclaims any intention or obligation, to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as expressly
required by applicable law.
The TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE Aurora Cannabis Inc.