StaffMarch 31, 2022
Auxly Cannabis Group Inc. (TSX ‐ XLY) (OTCQX: CBWTF) released its fourth-quarter and full-year 2021 financial results with revenue rising 20% sequentially to $29.3 million in the quarter. Auxly also reported that the net losses for the fourth quarter were $18.3 million, which rose from the previous quarter’s net loss of $13.5 million.
For the full-year net revenues rose 79% to $83.8 million versus $46.7 million during 2020. Auxly said revenue was comprised of approximately 69% in Cannabis 2.0 Product sales, with the remainder from Cannabis 1.0 Product sales. Net revenues improved as a result of its expansion into Cannabis 1.0 Products and continued leadership in Cannabis 2.0 Products. Consistent with prior periods, as the company does not participate in the Quebec market, approximately 85% of cannabis sales throughout 2021 originated from sales to British Columbia, Alberta and Ontario.
Net losses for the year were $33.7 million representing a net loss of $0.06 per share on a basic and diluted basis. The company said the improvement of approximately $51.7 million relative to the same period in 2020 was primarily a result of net income of $12.2 million related to the sale of KGK, recognition of a gain from the Imperial Brands Debenture amendments, improvements in continuing operating gross profits and income tax recoveries, partially offset by an impairment charge related to the Curative recoverable amount, losses on the investment in Auxly Leamington while it was recorded as a joint venture and higher interest and depreciation and amortization expenses.
“Auxly exited 2021 as the 5th largest LP in Canada by share of market,” said CEO Hugo Alves. “Over the course of 2021 we were able to successfully extend our brands into Cannabis 1.0 formats, significantly enhance our cultivation capabilities and solidify our position within the top 10 licensed producers in both dried flower and pre-roll sales; all while maintaining our #1 overall position in the Cannabis 2.0 product segment and a dominant 23% share of market in vapes. We successfully launched 51 exciting new SKUs over the course of 2021, including 10 first-to-market innovations, and we will continue to work relentlessly to keep you smiling in 2022 with 60 new product innovations planned for release over the course of the year. I am proud of the dedication that our team has shown – at every site and every facility – in pulling together as one organization and achieving these results and I am excited to carry the momentum that we’ve earned over the course of 2021 into the new year and continue to win with our customers and consumers.”
The company noted that cash flows and financing of the business improved dramatically with total net cash used of $5.9 million in 2021 as compared to a use of $22.9 million in 2020.
2022 Outlook
Auxly said its key priority in 2022 is to achieve Adjusted EBITDA profitability by continuing to grow top-line revenue while enhancing gross profit margins through leveraging the increasing flower output from its Auxly Leamington facility, focused and differentiated brand and product offerings, increased depth and breadth of distribution, and cost optimization through investments in automation to increase production capabilities and efficiency and continuous improvement initiatives.
William Sumner
