Organigram Reports Positive Adjusted EBITDA for the 4th Consecutive Quarter
Organigram Holdings (TSXV: OGI) (NASDAQ: OGI) announced its fiscal Q3 financials this morning. For your convenience, we’ve put together a recap of the top earnings, operations, and management commentary highlights. Also included below are Organigram’s financial statements and their investor webcast replay details.
Fiscal Q3 Earnings Highlights:
- Reported Q3 net revenue of $24.8 million.
- 2019 year to date net revenue was $64.1 million.
- Reported a Q3 net loss of $10.2 million or $(0.07) per share on a diluted basis.
- Was largely due to non-cash fair value changes to biological assets in inventory.
- Q3 net income from continuing operations was $12.9 million $0.09 per share on a diluted basis.
- Q3 year to date gross margin including impact of fair value adjustments was ($0.2 million).
- 2019 year to date gross margin including impact of fair value adjustments was $59.5 million.
- Q3 adjusted gross margin excluding the impact of non-cash fair value adjustments was $12.3 million or 50%.
- 2019 year to date gross margin excluding the impact of non-cash fair value adjustments was $37.1 million or 58%.
- 2019 year to date gross margin including impact of fair value adjustments was $59.5 million.
- Q3 adjusted EBITDA was $7.7 million or 31%.
- Adjusted EBITDA was positive for the 4th consecutive quarter.
- 2019 year to date adjusted EBITDA was $27.8 million or 43%.
- Organigram had $87.8 million in cash and short-term investments as of May 31, 2019.
- The Company converted the principal amount outstanding of the remaining debentures and eliminated a $49.3 million in current liabilities from its balance sheet.
- Organigram closed a debt financing in the aggregate amount of approximately $140 million at attractive rates.
Source: Shutterstock
Fiscal Q3 Operational Highlights:
- Organigram expects significant growth for fiscal 2020 with the legalization of edibles and derivative products.
- As well as with the increase in the number of cannabis retail stores.
- Large increase in the company’s harvested amounts.
- Further economies of scale expected to be realized.
- As well as with the increase in the number of cannabis retail stores.
- Received all phase 4A licenses from Health Canada for their growing rooms.
- Boosting current licensed target production capacity to 61,000 kg/yr.
- Phase 4B expected to add 28,000 kg/yr of target production capacity.
- 17 of 33 Phase 4B grow rooms submitted for licensing in June 2019.
- Remaining 16 grow rooms expected to be submitted in September 2019.
- The 29 grow rooms in Phase 4C are expected to be completed by end of 2019.
- Phase 4C grow rooms are expected to increase target production capacity by 24,000 kg/yr to 113,000 kg/yr.
- Organigram announced new partnerships with PAX Labs for vaporizer pens.
- As well as with the Feather Company to produce cannabis-infused chocolates and powdered beverage products.
- Organigram believes the best near-term growth opportunities remains in Canada.
- Due to additional planned retail store openings as well as the legalization of edibles and derivative products.
- The company believes the U.S. and International markets represent a significant opportunity.
- Particularly the hemp and CBD market.
- Organigram expects to participate in the U.S. market in due time and will do so in compliance with applicable laws.
Management Commentary:
“We continued to report strong sales in our third quarter and now have distribution in all ten provinces. In our fiscal year to date, we have generated strong operating and financial results, placing us among the leaders in the Canadian industry. While we saw a temporary reduction in yield per plant in Q3 due to temporary changes in growing protocols, not only have our yields returned to historical levels, but we have seen a meaningful increase in average cannabinoid levels in harvests to date in Q4” said Greg Engel, Chief Executive Officer.
“We have seen adult recreational cannabis sales highly correlate to the presence of physical retail stores based on a comparison of the provinces in Canada. The Canadian market is positioned to grow significantly with more retail stores opening – particularly in the two most populous provinces of Ontario and Quebec – and the upcoming legalization and availability of edibles and derivative products. We expect to remain a national market leader by maintaining our track record of meeting supply commitments and delivering high-quality product to our customers. Our experienced team continues to de-risk our edibles and derivative strategy in order to be ready to launch the most popular cannabis product forms upon legalization.”
“We are very excited for fiscal 2020 which should build upon an already successful 2019. By the first half of fiscal 2020, we expect to benefit from record harvests of high-quality indoor-grown dried flower, the sale of a variety of vape pen products as well as our initial edible product forms. The Canadian market will be much more mature from a distribution and retail perspective with Ontario anticipated to have three-times the current number of stores by October 2019 and Quebec planning to more than double its retail presence by March 2020 and with Alberta continuing to grow its already leading number of retail distribution points.”
Income Statement:
Balance Sheet:
Capital Structure:
Fiscal Q3 Earnings Conference Call:
- Date: July 15, 2019
- Time: 8:00 a.m. Eastern Time
- Toll Free (North America) Dial-In Number: 1-866-211-4093
- International Dial-In Number: 647-689-6727
- Webcast: https://event.on24.com/wcc/r/2041734/0C9BEBE1006D6A654B289579CB38CA0F
- Webcast reply available 24 hours after call here
For more details on the numbers please read the full Organigram Earnings press release here
Investors looking for additional information on Organigram are encouraged to visit the company’s website here.
Additional investor due diligence links: Organigram IR Website & Organigram Investor Deck
Stay up to date with all things Organigram by following them on social media: Facebook, Twitter, Instagram and LinkedIn
About Organigram Holdings:
Organigram Holdings Inc. is a NASDAQ Global Select and TSX Venture Exchange listed company whose wholly owned subsidiary, Organigram Inc., is a licensed producer of cannabis and cannabis-derived products in Canada.
Organigram is focused on producing high-quality, indoor-grown cannabis for patients and adult recreational consumers in Canada, as well as developing international business partnerships to extend the Company’s global footprint. Organigram has also developed a portfolio of adult use recreational cannabis brands including The Edison Cannabis Company, Ankr Organics, Trailer Park Buds and Trailblazer. Organigram’s primary facility is located in Moncton, New Brunswick and the Company is regulated by the Cannabis Act (Canada) and the Cannabis Regulations (Canada).
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