Aurora(ACB) - 2025 Q2 - Quarterly Report

Condensed Consolidated Interim Financial Statements Condensed Consolidated Interim Statements of Financial Position Total assets decreased to $808.8 million as of September 30, 2024, from $838.7 million, with liabilities and equity also declining Consolidated Balance Sheet Highlights (in thousands of CAD) | Account | September 30, 2024 | March 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $84,921 | $113,439 | ($28,518) | | Inventory | $170,986 | $143,602 | $27,384 | | Total Assets | $808,774 | $838,673 | ($29,899) | | Total Liabilities | $225,801 | $236,803 | ($11,002) | | Total Equity | $582,973 | $601,870 | ($18,897) | Condensed Consolidated Interim Statements of Loss and Comprehensive Loss Net income from continuing operations was $6.5 million for the six months ended September 30, 2024, with total net loss improving to $7.8 million despite discontinued operations Performance Summary (in thousands of CAD) | Metric | Six Months Ended Sep 30, 2024 | Six Months Ended Sep 30, 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Net Revenue | $164,557 | $137,851 | +19.4% | | Gross Profit | $86,711 | $60,421 | +43.5% | | Income (Loss) from Operations | ($1,515) | ($25,246) | Improvement | | Net Income (Loss) from Continuing Operations | $6,519 | ($19,758) | Turnaround | | Net Loss from Discontinued Operations | ($14,336) | ($10,700) | Increased Loss | | Net Loss | ($7,817) | ($30,458) | Reduced Loss | Earnings (Loss) Per Share | Per Share Data | Six Months Ended Sep 30, 2024 | Six Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Continuing Operations (Basic & Diluted) | $0.16 | ($0.45) | | Discontinued Operations (Basic & Diluted) | ($0.26) | ($0.29) | | Total Operations (Basic & Diluted) | ($0.10) | ($0.74) | Condensed Consolidated Interim Statements of Changes in Equity Total equity decreased by $18.9 million to $583.0 million due to a $16.0 million comprehensive loss for the six months ended September 30, 2024 Equity Reconciliation (in thousands of CAD) | Description | Amount | | :--- | :--- | | Balance, March 31, 2024 | $601,870 | | Comprehensive loss for the period | ($16,046) | | Put option liability adjustment | ($7,987) | | Share-based compensation & issuance | $5,242 | | Other | ($106) | | Balance, September 30, 2024 | $582,973 | Condensed Consolidated Interim Statements of Cash Flows Cash and cash equivalents decreased by $28.5 million to $84.9 million for the six months ended September 30, 2024, with $16.5 million used in operating activities Cash Flow Summary (in thousands of CAD) | Activity | Six Months Ended Sep 30, 2024 | Six Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($16,516) | ($42,119) | | Net Cash Used in Investing Activities | ($2,824) | ($6,137) | | Net Cash Provided by (Used in) Financing Activities | ($3,242) | ($58,208) | | Decrease in Cash and Cash Equivalents | ($28,518) | ($106,025) | | Cash and Cash Equivalents, Beginning of Period | $113,439 | $234,942 | | Cash and Cash Equivalents, End of Period | $84,921 | $128,917 | Notes to the Condensed Consolidated Interim Financial Statements Note 1: Nature of Operations Aurora Cannabis Inc. produces and distributes medical and consumer cannabis globally, also holding a 50.1% interest in Bevo Agtech Inc., a plant propagation supplier - The company's principal business lines focus on cannabis-related products in Canada and international markets[15] - Key business activities include medical and consumer cannabis in Canada, and wholesale medical cannabis distribution in the EU, Australia, and other international markets[21] - Aurora holds a 50.1% controlling interest in Bevo Agtech Inc., a North American plant propagation business[15] Note 2: Material Accounting Policies and Judgments Financial statements adhere to IFRS and IAS 34, consolidating subsidiaries and reporting discontinued operations separately, with IAS 1 amendments having no material impact - The financial statements adhere to International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS) 34 for interim reporting[17] - Effective April 1, 2024, the company adopted amendments to IAS 1 regarding the classification of liabilities as current or non-current, with no impact on the financial statements[24] - The company is currently assessing the impact of IFRS 18, which will replace IAS 1 for reporting periods beginning on or after January 1, 2027[26][27] Note 3: Biological Assets Biological assets totaled $41.2 million as of September 30, 2024, a slight decrease, primarily cannabis and propagation plants, with valuation sensitive to market factors Biological Assets Breakdown (in thousands of CAD) | Category | September 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | Indoor cannabis production | $22,995 | $21,522 | | Plant propagation production | $17,757 | $21,252 | | Outdoor cannabis production | $460 | $0 | | Total | $41,212 | $42,774 | - The weighted average fair value less cost to complete and sell for indoor cannabis was $4.39 per gram, up from $3.76 per gram at March 31, 2024[29] Note 4: Inventory Inventory increased to $171.0 million at September 30, 2024, primarily in harvested cannabis, with $133.7 million expensed to cost of sales and $30.8 million in provisions Inventory Carrying Value (in thousands of CAD) | Category | September 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | Harvested cannabis | $133,011 | $104,149 | | Extracted cannabis | $21,533 | $22,441 | | Supplies and consumables | $14,443 | $14,987 | | Merchandise and accessories | $1,999 | $2,025 | | Total | $170,986 | $143,602 | - For the six months ended September 30, 2024, inventory expensed to cost of sales was $133.7 million, compared to $120.2 million in the prior year period[32] Note 5: Property, Plant and Equipment PP&E net book value decreased to $276.5 million as of September 30, 2024, mainly due to $14.1 million depreciation, partially offset by $14.7 million additions PP&E Net Book Value (in thousands of CAD) | Category | September 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | Total owned assets | $246,542 | $263,590 | | Total right-of-use lease assets | $29,940 | $30,734 | | Total PP&E | $276,482 | $294,324 | - During the six months ended September 30, 2024, the company recognized $14.1 million in depreciation expense, of which $8.4 million was included in cost of sales[34] Note 6: Assets and Liabilities Held for Sale and Discontinued Operations Uruguayan operations were classified as held for sale, incurring an $11.6 million impairment loss, contributing to a $14.3 million net loss from discontinued operations Assets and Liabilities Held for Sale - In June 2024, the company decided to exit its operations in Uruguay (ICC Labs Inc.), reclassifying its assets and liabilities to 'held for sale'[35] - An impairment loss of $11.6 million was recognized during the six months ended September 30, 2024, to record the assets held for sale at their fair value less costs to sell[36] Discontinued Operations Net Loss from Discontinued Operations (in thousands of CAD) | Period | 2024 | 2023 | | :--- | :--- | :--- | | Three months ended Sep 30 | ($14,640) | ($2,566) | | Six months ended Sep 30 | ($14,336) | ($10,700) | - Discontinued operations include the closures of the Aurora Nordic facility, Reliva, the dissolution of the Growery B.V. partnership, and the exit from ICC operations in Uruguay[37] Note 7: Intangible Assets and Goodwill Intangible assets totaled $42.1 million and goodwill $43.2 million as of September 30, 2024, with goodwill allocated to Cannabis and Plant Propagation segments Intangible Assets and Goodwill (in thousands of CAD) | Category | September 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | Total intangible assets | $42,098 | $40,850 | | Goodwill | $43,180 | $43,180 | | Total | $85,278 | $84,030 | - Goodwill is allocated to the Cannabis segment ($24.5 million) and the Plant Propagation segment ($18.7 million)[39] Note 8: Loans and Borrowings Loans and borrowings totaled $57.5 million as of September 30, 2024, primarily through Bevo, with ongoing discussions to extend Term Facility 1 maturity Loans and Borrowings Continuity (in thousands of CAD) | Description | Amount | | :--- | :--- | | Balance, March 31, 2024 | $57,259 | | Drawings | $6,346 | | Principal repayments | ($6,108) | | Balance, September 30, 2024 | $57,510 | - As of September 30, 2024, borrowings consisted of $34.5 million from Term Facility 1, $4.0 million from Term Facility 2, and $16.5 million from the revolver[43][44][45] Note 9: Lease Liabilities Lease liabilities decreased to $43.5 million as of September 30, 2024, from $47.5 million, due to payments, modifications, and reclassification from discontinued operations Lease Liabilities Continuity (in thousands of CAD) | Description | Amount | | :--- | :--- | | Balance, March 31, 2024 | $47,532 | | Lease additions | $6,106 | | Lease payments | ($4,187) | | Transfer to liabilities held for sale | ($1,326) | | Lease modifications | ($6,418) | | Other (FX, Interest) | $1,753 | | Balance, September 30, 2024 | $43,460 | Note 10: Share Capital As of September 30, 2024, 54,862,958 common shares were outstanding, alongside 7,066,027 warrants with a weighted average exercise price of $43.74 - At September 30, 2024, there were 54,862,958 Common Shares issued and outstanding[49] Share Purchase Warrants Outstanding | Description | Warrants () | Weighted Avg. Exercise Price ($) | | :--- | :--- | :--- | | Balance, March 31, 2024 | 7,074,348 | 44.34 | | Expired | (8,321) | 487.95 | | Balance, September 30, 2024 | 7,066,027 | 43.74 | Note 11: Share-Based Compensation Share-based compensation expense totaled $7.5 million for the six months ended September 30, 2024, with a $4.2 million derivative liability for cash-settled plans Share-Based Compensation Expense (Six Months Ended Sep 30, 2024, in thousands of CAD) | Plan | Expense | | :--- | :--- | | Stock Options | $1,600 | | RSUs | $2,700 | | DSUs | $1,100 | | PSUs | $2,100 | | Total | $7,500 | - The company has cash-settled DSU and PSU plans which are classified as derivative liabilities As of September 30, 2024, the related liability was $2.3 million for DSUs and $1.9 million for PSUs[66][67] Note 12: Income (Loss) Per Share Basic and diluted earnings per share from continuing operations was $0.16, resulting in a total loss per share of ($0.10) for the six months ended September 30, 2024 Basic and Diluted Loss Per Share | Per Share Data | Six Months Ended Sep 30, 2024 | Six Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Continuing Operations | $0.16 | ($0.45) | | Discontinued Operations | ($0.27) | ($0.29) | | Total Operations | ($0.22) | ($0.74) | Note 13: Supplemental Cash Flow Information Non-cash working capital used $18.9 million in cash, and restricted cash totaled $66.7 million as of September 30, 2024, including $39.7 million for self-insurance - Changes in non-cash working capital used $18.9 million in cash for the six months ended September 30, 2024, compared to a use of $11.0 million in the prior year period[69] - As of September 30, 2024, restricted cash of $66.7 million included $39.7 million for a segregated cell insurance program and $22.6 million for self-insurance[69] Note 14: Commitments and Contingencies The company faces legal proceedings, including an $8 million U.S. class action settlement covered by insurance, and has $2.9 million in capital and purchase commitments - A U.S. class action has a preliminary settlement of $8 million, which is expected to be covered by insurance[71] - The company is defending against other claims, including a purported class action in Alberta and a civil claim for $8.9 million from a former landlord[75][76] - The company has $2.9 million in future capital and purchase commitments payable over the next 12 months[80] Note 15: Revenue Total net revenue grew 19.4% to $164.6 million for the six months ended September 30, 2024, driven by strong medical cannabis and plant propagation performance Net Revenue by Segment (Six Months Ended Sep 30, in thousands of CAD) | Segment | 2024 | 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Medical Cannabis | $108,517 | $84,831 | +27.9% | | Consumer Cannabis | $21,955 | $25,102 | -12.5% | | Wholesale Bulk Cannabis | $2,370 | $860 | +175.6% | | Plant Propagation | $31,715 | $27,058 | +17.2% | | Total Net Revenue | $164,557 | $137,851 | +19.4% | Net Revenue by Geography (Six Months Ended Sep 30, in thousands of CAD) | Geography | 2024 | 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Canada | $83,369 | $81,293 | +2.6% | | Australia | $24,431 | $13,915 | +75.6% | | Europe | $30,700 | $20,094 | +52.8% | | U.S. | $26,057 | $22,549 | +15.6% | | Total Net Revenue | $164,557 | $137,851 | +19.4% | Note 16: Segmented Information The Cannabis segment generated $132.8 million in net revenue and $21.2 million in income, while Plant Propagation had $31.7 million revenue and a $3.5 million loss Segment Performance (Six Months Ended Sep 30, 2024, in thousands of CAD) | Operating Segment | Net Revenue | Gross Profit before FV Adjustments | Net Income (Loss) before Taxes | | :--- | :--- | :--- | :--- | | Cannabis | $132,842 | $66,373 | $21,215 | | Plant propagation | $31,715 | $4,461 | ($3,453) | - Non-current assets are primarily located in Canada ($302.7 million), with smaller holdings in Australia ($39.4 million) and the EU ($29.8 million)[86] Note 17: Fair Value of Financial Instruments Financial instruments at fair value include a $54.0 million Level 3 put option liability and $4.9 million in derivative liabilities from warrants and cash-settled units - The 'Other long term liability' of $54.0 million includes a put option from the Bevo acquisition, valued at $53.5 million using a Level 3 Monte Carlo simulation[89] Financial Instruments at Fair Value (in thousands of CAD) | Instrument | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | | Other long term liability | $530 | $0 | $53,517 | $54,047 | | Derivative liabilities | $3,053 | $1,874 | $0 | $4,927 | Note 18: Financial Instruments Risk The company manages credit and liquidity risks, with $84.9 million in cash and access to U.S.$396.4 million under its Shelf Prospectus for future operations - As of September 30, 2024, $25.0 million of accounts receivable were from non-government wholesale customers[92] Undiscounted Contractual Obligations (in thousands of CAD) | Obligation | Total | ≤1 year | | :--- | :--- | :--- | | Accounts payable and accrued liabilities | $39,032 | $39,032 | | Lease liabilities | $89,394 | $8,282 | | Loans and borrowings | $57,563 | $53,737 | | Capital commitments | $2,858 | $2,858 | | Total | $188,847 | $103,909 | - The company has access to capital resources including $84.9 million in cash and approximately U.S.$396.4 million available for issuance under its 2023 Shelf Prospectus[98]