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“We’re happy to have delivered on our dedication to realize constructive Adjusted EBITDA ¹ in Q2 2023, following an incredible effort to appreciate roughly $340 million of complete annualized financial savings since February 2020 . We have now right-sized our enterprise whereas remaining the #1 Canadian LP in international medical hashish revenues, and having demonstrated natural quarter over quarter income development throughout all of our hashish segments throughout Q2 2023. Moreover, our strong stability sheet stays in a web money place which places it among the many strongest within the business, and we continued to make vital strides in lowering our debt within the current quarter,” acknowledged Miguel Martin , Chief Govt Officer of Aurora.

“Income development in Q2 2023 was primarily pushed by our distinctive, moveable, and worthwhile worldwide medical program. Our Canadian rec enterprise additionally demonstrated sequential development pushed by vital product innovation, and our Canadian medical hashish enterprise continued to profit from robust affected person relationships and excessive obstacles to entry. Q2 2023 additionally included the primary full-quarter of outcomes from our current Bevo Agtech Inc. (” Bevo “) acquisition, for which we anticipate an excellent greater top-line and Adjusted EBITDA ¹ contribution in Q3 2023 versus Q2 2023 because of the inherent seasonality of this enterprise,” he added.

“Wanting forward, we’re targeted on worthwhile development alternatives throughout all segments, ongoing self-discipline in capital deployment, and our skill to generate constructive working money circulation as we proceed to construct worth for shareholders,” he concluded.

Second Quarter 2023 Highlights
(Until in any other case acknowledged, comparisons are made between fiscal Q2 2023, Q1 2023, and Q2 2022 outcomes and are in Canadian {dollars})

Consolidated:

• Complete web income ¹ was $61.7 million , as in comparison with the prior quarter web income ¹ of $49.3 million and $60.6 million within the prior yr interval. The rise from the prior quarter was because of development throughout all hashish enterprise segments and a full quarter contribution of $6.6 million from Bevo, acquired in August 2022 .
• Excluding the affect of the non-core bulk wholesales, adjusted gross margin earlier than truthful worth changes on hashish web revenue1 for Q2 2023 remained robust and regular, and nicely above the business common, at 49% in comparison with 54% in Q1 2023 and 54% in Q2 2022. Sequentially, adjusted gross margin was impacted by development within the shopper channel and incremental export income into growing nations, each of which ship wholesome gross margins however at ranges beneath our Canadian and European medical companies.

Medical Hashish:

• Medical hashish web income ¹ was $39.5 million , a 25% enhance from the prior quarter and a 14% lower from the prior yr interval, delivering 64% of Aurora’s Q2 2023 consolidated web income ¹ and 87% of Adjusted gross revenue earlier than truthful worth changes ¹ .
• The rise in web revenue1 from Q1 2023 was primarily attributable to development into worldwide export markets akin to Australia , Poland , the UK, and Cayman Islands , demonstrating the Firm’s skill to navigate complicated import/export licensing necessities to take part in these high-growth markets. The lower from the prior yr quarter was primarily attributable to timing of gross sales to sure worldwide export markets.
• Adjusted gross margin earlier than truthful worth changes ¹ on medical hashish web income was 61% in comparison with 63% within the prior yr interval and 67% sequentially. The continued power of the Firm’s medical adjusted gross margins ¹ mirror the direct-to-patient mannequin in Canada and robust and sustained presence within the excessive margin worldwide medical enterprise. The lower is primarily pushed by greater gross sales into sure growing worldwide export markets, which yield a barely decrease adjusted gross margin ¹ , however nonetheless contribute robust constructive adjusted gross income ¹ .

Client Hashish:

• Client hashish web income ¹ was $14.6 million , a 7% enhance from the prior quarter. Excluding the one-time Q1 2023 refund of excise taxes, Q2 2023 web income ¹ was a 13% sequential enhance.
• The rise in web revenue1 from Q1 2023 was pushed by development in each Aurora’s premium model San Rafael ’71, and by the Firm’s worth model Each day Particular, which presents a robust shopper efficiency/high quality/value proposition.
• Adjusted gross margin earlier than truthful worth changes ¹ on shopper hashish web income was 20%, in comparison with 25% within the prior quarter and 23% within the comparable prior yr interval.

Promoting, Common and Administrative (“SG&A”):

• SG&A, together with Analysis and Improvement (” R&D “), was $41.6 million in Q2 2023 which incorporates $14.0 million of restructuring, non-recurring, and out-of-period prices, and $0.9 million in market growth prices.
• Excluding the non-routine gadgets famous above, SG&A and R&D continued to be nicely managed and declining at $26.6 million throughout Q2 2023 versus $32.1 million within the prior quarter and $39.3 million within the prior yr interval, offered on a comparable foundation.

Plant Propagation:

• Plant propagation revenue1 was comprised wholly from the Bevo enterprise, contributing $6.6 million of web revenue1 and represents a rise of $3.3 million from the prior quarter, which represented the truncated interval from the date of closing of Aurora’s funding in Bevo on August 25, 2022 . Bevo’s enterprise, is fairly predictable with buyer orders recognized nicely upfront of planting dates, and in lots of situations requiring buyer deposits previous to planting coupled with many lengthy tenured buyer relationships. Nonetheless, Bevo’s enterprise does exhibit operational seasonality, with the months of January to June representing the busiest operational and monetary interval for Bevo with July to December being much less operationally intensive.

Web Loss:

Web loss for the three months ended December 31, 2022 was $67.2 million in comparison with $51.9 million within the prior quarter and $75.1 million for a similar interval within the prior yr. The rise in web lack of $15.3 million from the prior quarter was primarily because of: (i) a rise in gross lack of $14.5 million and (ii) a rise of $2.3 million in impairment of property, plant and tools. This was primarily offset by (i) a rise of $9.5 million in different positive aspects, and (ii) a $7.1million enhance in overseas alternate positive aspects. The lower in web lack of $8.0 million from the identical interval within the prior yr was primarily because of a rise in different earnings of $24.0 million primarily consisting of: (i) a rise of $8.3 million in overseas alternate positive aspects (ii) a rise of $6.8 million in different positive aspects (iii) a lower of $5.6 million in finance prices and (iv) a lower of $2.0 million in impairment of property, plant and tools and decrease working bills of $5.9 million , partially offset by a decrease gross revenue of $21.8 million .

Adjusted EBITDA:

Adjusted EBITDA ¹ elevated to constructive $1.4 million in Q2 2023 versus a lack of $7.4 million in Q1 2023 and lack of $7.1 million within the prior yr interval. The rise in Adjusted EBITDA ¹ , as in comparison with the earlier quarter and the identical interval within the prior yr is primarily attributable to reductions in SG&A and, for the sequential comparative, due additionally to income development throughout all markets.

Operational Effectivity Plan, Stability Sheet Power, & Money Use:

Aurora has accomplished its beforehand introduced strategic transformation plan. The achievement of serious and sustainable working price and SG&A reductions resulted in constructive Adjusted EBITDA throughout Q2 2023.

Aurora has one of many strongest stability sheets within the Canadian Hashish business with roughly $310 million of money, together with $65 million of restricted money as of February 8, 2023 and entry to the bottom shelf prospectus filed on March 30, 2021 (the ” 2021 Shelf Prospectus “), together with US $134.4 million remaining securities on the market below the 2021 at-the-market (ATM) program (the ” ATM Program “). Throughout the three months ended December 31, 2022 , the Firm issued 39,500,341 frequent shares below the ATM Program for web proceeds of $68.8 million (US $49.7 million ).

Throughout the three months ended December 31, 2022 , the Firm repurchased a complete of $135.0 million (US $99.0 million ) in principal quantity of convertible senior notes due 2024 (” Senior Notes “) for $128.7 million (US $94.4 million ), plus accrued curiosity. Aurora might, occasionally and topic to market situations, repurchase its convertible notes, together with in open market purchases and privately negotiated transactions.

Money use is printed within the following desk:

Key Quarterly Monetary and Working Outcomes

Convention Name

Aurora will host a convention name immediately, Thursday, February 9, 2023 , to debate these outcomes. Miguel Martin, Chief Govt Officer, and Glen Ibbott , Chief Monetary Officer, will host the decision beginning at 5:00 p.m. Japanese time | 3:00 p.m. Mountain Time . A query and reply session will observe administration’s presentation.

Convention Name Particulars

This weblink has additionally been posted to the Firm’s “Investor Information” hyperlink at https://investor.auroramj.com/ below “Information & Occasions”.

About Aurora

Aurora is opening the world to hashish, serving each the medical and shopper markets. Headquartered in Edmonton, Alberta , Aurora is devoted to serving to individuals enhance their lives. The Firm’s adult-use model portfolio consists of Aurora Drift , San Rafael ’71 , Each day Particular , Whistler , Being and Greybeard , in addition to CBD manufacturers, Reliva and KG7 . Medical hashish manufacturers embrace MedReleaf, CanniMed, Aurora and Whistler Medical Marijuana Co. Aurora additionally has a controlling curiosity in Bevo Farms Ltd., North America’s main provider of propagated agricultural vegetation. Pushed by science and innovation, and with a concentrate on high-quality hashish merchandise, Aurora’s manufacturers proceed to interrupt by way of as business leaders within the medical, efficiency, wellness and grownup leisure markets wherever they’re launched. Be taught extra at www.auroramj.com and observe us on Twitter and LinkedIn . Aurora’s frequent shares commerce on the NASDAQ and TSX below the image “ACB”.

Ahead Wanting Statements

This information launch consists of statements containing sure “forward-looking info” inside the that means of relevant securities regulation (“forward-looking statements”). Ahead-looking statements are often characterised by phrases akin to “plan”, “proceed”, “count on”, “challenge”, “intend”, “consider”, “anticipate”, “estimate”, “might”, “will”, “potential”, “proposed” and different related phrases, or statements that sure occasions or situations “might” or “will” happen. Ahead-looking statements made on this information launch embrace, however should not restricted to, statements with respect to:

• professional forma measures together with income, money circulation, Adjusted gross margin earlier than truthful worth changes ¹ , and anticipated SG&A run-rates;
• the Firm’s achievement of the beforehand introduced strategic transformation plan and constructive Adjusted EBITDA ¹ ;
• the Firm’s continued concentrate on worthwhile development alternatives, ongoing self-discipline in capital deployment, price financial savings and Adjusted EBITDA ¹ targets;
• the Firm’s skill to navigate complicated import/export licensing necessities to take part in high-growth markets;
• stability sheet power and availability of funds below the ATM Program;
• the acquisition of Bevo and the anticipated contribution to prime line and Adjusted EBITDA ¹ ; and
• the creation of worth for shareholders, together with the long run achievement of constructive working money circulation.

These forward-looking statements are solely predictions. Ahead wanting info or statements contained on this information launch have been developed based mostly on assumptions administration considers to be cheap. Materials components or assumptions concerned in growing forward-looking statements embrace, with out limitation, publicly out there info from governmental sources in addition to from market analysis and business evaluation and on assumptions based mostly on information and information of this business which the Firm believes to be cheap. Ahead-looking statements are topic to a wide range of dangers, uncertainties and different components that administration believes to be related and cheap within the circumstances may trigger precise occasions, outcomes, stage of exercise, efficiency, prospects, alternatives or achievements to vary materially from these projected within the forward-looking statements. These dangers embrace, however should not restricted to, the flexibility to retain key personnel, the flexibility to proceed investing in infrastructure to help development, the flexibility to acquire financing on acceptable phrases, the continued high quality of our merchandise, buyer expertise and retention, the event of third occasion authorities and non-government shopper gross sales channels, administration’s estimates of shopper demand in Canada and in jurisdictions the place the Firm exports, expectations of future outcomes and bills, the chance of profitable integration of acquired enterprise and operations, administration’s estimation that SG&A will develop solely in proportion of income development, the flexibility to broaden and preserve distribution capabilities, the affect of competitors, the final affect of economic market situations, the yield from hashish rising operations, product demand, adjustments in costs of required commodities, competitors, and the chance for adjustments in legal guidelines, guidelines, and rules within the business, epidemics, pandemics or different public well being crises, together with the present outbreak of COVID-19, and different dangers, uncertainties and components set out below the heading “Threat Elements” within the Firm’s annual info kind dated September 20, 2022 (the “AIF”) and filed with Canadian securities regulators out there on the Firm’s issuer profile on SEDAR at www.sedar.com and filed with and out there on the SEC’s web site at www.sec.gov . The Firm cautions that the listing of dangers, uncertainties and different components described within the AIF will not be exhaustive and different components may additionally adversely have an effect on its outcomes. Readers are urged to contemplate the dangers, uncertainties and assumptions rigorously in evaluating the forward-looking statements and are cautioned to not place undue reliance on such info. The Firm is below no obligation, and expressly disclaims any intention or obligation, to replace or revise any forward-looking statements, whether or not because of new info, future occasions or in any other case, besides as expressly required by relevant securities regulation.

Non-GAAP Measures

This information launch comprises reference to sure monetary efficiency measures that aren’t acknowledged or outlined below IFRS (termed ” Non-GAAP Measures “). Because of this, this information might not be similar to information offered by different licensed producers of hashish and hashish firms. Non-GAAP Measures must be thought-about along with different information ready in accordance with IFRS to allow buyers to guage the Firm’s working outcomes, underlying efficiency and prospects in a way much like Aurora’s administration. Accordingly, these non-GAAP Measures are meant to offer further info and to help administration and buyers in assessing monetary efficiency and shouldn’t be thought-about in isolation or as an alternative to measures of efficiency ready in accordance with IFRS.

The knowledge included below the heading ” Cautionary Assertion Relating to Sure Non-GAAP Efficiency Measures ” within the Firm’s administration’s dialogue and evaluation for the three and 6 months ended December 31, 2022 and 2021 (the ” MD&A “) is included by reference into this information launch. The MD&A is on the market on the Firm’s issuer profile on SEDAR at www.sedar.com .

Web Income, Adjusted Gross Revenue and Margin

Web income, adjusted gross revenue earlier than FV changes, and adjusted gross margin earlier than FV changes are Non-GAAP Measures and may be reconciled with income, gross revenue and gross margin, essentially the most instantly comparable GAAP monetary measures, respectively, as follows:

Web Promoting Worth of Dried Hashish Excluding Bulk Gross sales

Web promoting value of dried hashish excluding bulk gross sales is a Non-GAAP Measure comprised of income from dried hashish excluding bulk gross sales much less excise taxes on dried hashish income excluding bulk gross sales and may be reconciled with income, essentially the most instantly comparable GAAP monetary measure, as follows:

Adjusted EBITDA

Adjusted EBITDA is a Non-GAAP Measure and may be reconciled with web earnings (loss), essentially the most instantly comparable GAAP monetary measure, as follows:

Adjusted SG&A

Adjusted SG&A is a Non-GAAP Measure and may be reconciled with gross sales and advertising and normal and administrative bills, essentially the most instantly comparable GAAP monetary measure, as follows:

Adjusted R&D

Adjusted R&D is a Non-GAAP Measure and may be reconciled with analysis and growth bills, essentially the most instantly comparable GAAP monetary measure, as follows:

Working Capital

Working capital is a Non-GAAP Measure and may be reconciled with complete present belongings and complete present liabilities, essentially the most instantly comparable GAAP monetary measure, as follows:

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SOURCE Aurora Hashish Inc.

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