E Organigram Q2 Financials: Downward Trend Continues

Organigram Holdings Inc. (OGI) announced its results for the Q2 2021 period ended February 28, 2021, and, like those of Q1, were dismal across the board.

Q2 Financial Highlights

(All results are presented in Canadian dollars and compared to the previous quarter. Go here to convert into other currencies.)

Interestingly, it would seem that Organigram management has tried to mask its dismal financial results in Q2 2021 by comparing said results with those of 12 months previous (i.e. Q2 2020) instead of the more current - and more meaningful - results from the prior quarter (i.e. Q1 2021). That being said, this summary does just that to give a better picture of how Organigram is trending.

  • Net Revenue: declined 24% to $14.6M
    • the company claims that they missed sales opportunities of approximately $7M due to production and processing constraints, as certain employees tested positive for COVID-19 which resulted in a significant number of facility staff having to isolate and
    • were also negatively impacted by certain provincial boards aiming to manage lower levels of inventory.
  • Gross Profit (Loss)declined 34% to a loss of $(17.2)M 
  • Gross Margin: declined to -5% from +10%
  • Adj. EBITDA: declined 34% to $(8.6)M
  • Net Profit (Loss): loss increased 94% to $(66.4)M
  • Cash/Equiv.: increased 73% to $232M

Management Commentary

Greg Engel, CEO, had the following comments:

  • “...We believe there are excellent prospects ahead for the industry, Organigram, and our shareholders.
    • Nearer term,
      • we are currently tracking to generate higher revenue in Q3 2021 as our new product portfolio continues to gain traction and we become better staffed to fulfill demand and
      • our recent acquisition of The Edibles and Infusions Corporation positions us to generate revenue from the largest single category of edibles, soft chews or gummies.
    • Longer term,
      • we are extremely excited about developing innovative and appealing products to consumers in collaboration with BAT
      • we see the potential for meaningful gross margin improvement as we
        • revitalize our dried flower portfolio with new Edison and Indi strains and
        • execute on a number of opportunities including the refinement of our cultivation, post-harvesting, and packaging processes.
  • All of this is made possible and supported by strong liquidity and a balance sheet that is largely debt-free.”
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