Aurora Cannabis Inc.
Company Overview
Aurora Cannabis Inc. (TSX:ACB) (NYSE:ACB) was founded in 2006 by Terry Booth, Steve Dobler, Dale Lesack and Chris Mayerson. It is the second-largest cannabis company in the world, and is gunning for first place. It has grown quickly by way of its aggressive acquisition strategy, which has also resulted in significant dilution for shareholders. Aurora intends to have more than 600,000 kg of production capacity primarily located in Canada. The company expects its highly automated greenhouses to result in cash costs well below $1 per gram. Aurora is dominant in the Canadian medical cannabis market and has a top-3 position in recreational sales. Aurora’s strategic investments include purchases in distribution, retail, pharmacy chains, and medical assets. Aurora is doing extraction in-house as well as through a partnership with Radient. Aurora is now active in 24 countries across five continents.
Management
Terry Booth, Chief Executive Officer. Mr. Booth has been Aurora’s CEO since he co-founded the company in 2013. He has been the President and CEO of six other businesses, these include Transtrue Vehicle Safety Inc. and Superior Safety Codes Inc.
Cam Battley, Chief Corporate Officer. Mr. Battley spent more than 20 years working in healthcare communications, including at Eli Lilly and Co. He got his start in cannabis at Bedrocan Canada.
Glen Ibbott, Chief Financial Officer. Mr. Ibbott spent two decades as a senior healthcare executive in the life sciences sector prior to joining Aurora. Was the CFO at QLT Inc., a Nasdaq- and TSX-listed biopharmaceutical company. Mr. Ibbott completed MBA degrees at Cornell University and Queen’s University and is a Canadian CPA, CA and a U.S. CPA.
Asset Overview
Aurora has the largest announced global footprint for cultivation capacity, it expects run-rate capacity to reach more than 625,000 kg/year in mid-2020. This includes about 500,000 kg in Canada and the remainder internationally, primarily in Denmark. Aurora intends to export a substantial amount of the product to international markets, as the Canadian market is unlikely capable of adsorbing such a large amount of capacity on its own. 
Key Financials
(C$M Unless Otherwise Stated)
| . | DEC '16 | MAR '17 | JUN '17 | SEP '17 | DEC '17 | MAR '18 | JUN '18 | SEP '18 | DEC '18 | MAR '19 |
|---|---|---|---|---|---|---|---|---|---|---|
| . | Q2-17 | Q3-17 | Q4-17 | Q1-18 | Q2-18 | Q3-18 | Q4-18 | Q1-19 | Q2-19 | Q3-19 |
| Income Statement | ||||||||||
| Sales | 3.9 | 5.2 | 5.9 | 8.2 | 11.7 | 16.1 | 19.1 | 29.7 | 54.2 | 65.1 |
| Gross Income | 1.3 | 3 | 2.4 | 3.6 | 6.4 | 4.2 | -2.7 | -9.4 | -12.5 | 0.6 |
| EBIT | -5.3 | -4.5 | -5.6 | -5.7 | -13.9 | -27.8 | -52.6 | -99.2 | -99.9 | -109.2 |
| EBITDA | -5 | -4.2 | -5.2 | -4.9 | -13.3 | -26.6 | -43 | -83.1 | -73.9 | -79.8 |
| Net Income | -2.7 | 0.1 | -4.8 | 3.6 | 7.7 | -19.2 | 79.9 | 105.5 | -237.8 | -158.4 |
| EPS (recurring) - $/sh | -0.02 | -0.01 | -0.01 | -0.01 | -0.02 | -0.05 | -0.04 | 0.06 | -0.12 | -0.13 |
| EPS (diluted) - $/sh | -0.01 | 0 | -0.01 | 0.01 | 0.02 | -0.04 | 0.14 | 0.12 | -0.25 | -0.16 |
| Diluted Shares Outstanding (M) | 263.9 | 313.1 | 366.5 | 376.2 | 406.6 | 478.9 | 568.1 | 863 | 969 | 1003 |
| Balance Sheet | ||||||||||
| Cash & ST Investments | 55.8 | 119.9 | 174.6 | 162.7 | 428.1 | 289.1 | 149.4 | 495.3 | 206.2 | 578.7 |
| Total Assets | 98.2 | 197.1 | 322.7 | 347.8 | 732.4 | 1671.4 | 1910.7 | 4955.4 | 4875.9 | 5549.8 |
| Total Debt | 24.8 | 22.6 | 73.6 | 76.6 | 0.3 | 209.2 | 203.2 | 291.1 | 347.6 | 639.1 |
| Total Liabilities | 27.6 | 39.3 | 113.5 | 112.6 | 176.8 | 284.6 | 347.6 | 552.4 | 575.8 | 1156.5 |
| Total Shareholders' Equity | 70.7 | 157.8 | 209.2 | 235.2 | 548.8 | 1376.1 | 1558.6 | 4399.5 | 4292.4 | 4387.5 |
| Book Value per Share | 0.27 | 0.5 | 0.57 | 0.63 | 1.17 | 2.45 | 2.74 | 4.57 | 4.3 | 4.32 |
| Tangible Book Value per Share | 0.21 | 0.43 | 0.37 | 0.42 | 0.9 | 0.77 | 1.01 | 0.94 | 0.55 | 0.5 |
| Cash Flow | ||||||||||
| Net Operating Cash Flow | -5.1 | -9.2 | 4.7 | -5 | -4.7 | -26.9 | -45.1 | -69.1 | -63.9 | -54.7 |
| Capital Expenditures | -4.2 | -8.1 | -12.8 | -21.1 | -32.9 | -43.7 | -39.3 | -72.1 | -78 | -96.7 |
| Net Investing Cash Flow | -4.2 | -12.8 | -29.4 | -28.4 | -79.1 | -326.3 | -104 | 23.3 | -62.4 | -91 |
| Net Financing Cash Flow | 41 | 77.2 | 73.2 | 1.3 | 307.1 | 233.3 | 6.8 | 105.4 | 68.2 | 448.2 |
| Free Cash Flow | -9.3 | -17.3 | -8.1 | -26 | -37.5 | -70.7 | -84.4 | -141.2 | -141.9 | -151.4 |
Timeline
January 14, 2019: Aurora purchased Whistler Cannabis for $175 million. Whistler is one of Canada’s premium cannabis brands. The product is organically certified and the facility is expected to reach 5,000 kg of capacity in mid-2019. (link)
September 10, 2018: Aurora purchased ICC Labs for $263 million. ICC is a licensed producer and distributor of medicinal and recreational cannabis/hemp in Uruguay and is a licensed producer in Colombia. (link)
June 12, 2018: Aurora purchased Anandia Laboratories Inc. for $115 million. Anandia is one of the industry leaders in science, genetics, and independent cannabis product testing. Anandia is focused on lab testing, R&D, tissue culture, and genetics. (link)
May 14, 2018: Aurora purchased MedReleaf Corp. for $3.2 billion. The MedReleaf transaction was the largest acquisition in the space. MedReleaf had substantial production capacity up and running and a large patient base for medical. (link)
November 24, 2017: Aurora purchased CanniMed Therapeutics Inc. for $1.1 billion. CanniMed is Canada’s longest running medical cannabis company. (link)
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