Organigram Holdings Inc. (Nasdaq: OGI) (TSX: OGI), a licensed producer of cannabis, announced its results for Q2 of FY2022 ended February 2022, today as follows:

Q2 Financial Highlights

(All results are presented in Canadian dollars and compared to the previous quarter NOT the same quarter a year ago (i.e. Q2 2021) as the company reports to provide a more accurate trend the financial health of the company is undergoing. Go here to convert into other currencies.)

• Net Revenue: increased +4.6% to $31.8M
• Adj. Gross Margin $: increased +51% to $8.3M
  • as a % on Net Revenue: increased to 26% from 18% 
• Sales, General & Admin.: increased 11% to $14M
• Adj. EBITDA: improved to $1.56M from $(1.9)M
• Net Profit (Loss): loss increased 215% to $(4.05)M 

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Management Commentary

Beena Goldenberg, CEO, said:

• “In addition to our continued success at building beloved brands, our ability to increase sales in international markets and capitalize on our accretive acquisitions, such as Laurentian and EIC, continue to contribute to our solid gains in market presence and sales growth.
• We are also progressing well with the Laurentian integration. In less than three months we have been able to significantly increase distribution and begin to implement the synergies planned at acquisition. Automation to optimize production is also underway and expected to be complete by the end of Fiscal 2022.” 

 Derrick West, CFO, stated

• “The additional revenue from Laurentian, and continued growth in recreational and B2B sales, combined with improving margins through improved operational efficiencies, allowed us to achieve positive Adjusted EBITDA two quarters earlier than originally projected.
• Our strong balance sheet and cash position as well as the completion of our facility expansion to meet market demand, positions us well to deliver sustained value to our shareholders.”

Outlook

Net revenue

• expects Q3 Fiscal 2022 revenue to be higher than Q2 Fiscal 2022 due to:
  • ongoing sales momentum,
  • stronger forecasted market growth,
  • the Company’s expanded product line in multiple segments,
  • greater capacity to meet demand at the Moncton Campus,
  • increased throughput at the Winnipeg facility,
  • and the Laurentian acquisition.

Adjusted gross margins

• expects to see a sequential improvement in adjusted gross margins in Q3 Fiscal 2022 due to:
  • economies of scale and efficiencies gained as it continues to scale up cultivation, including the grow rooms that will be available after completing the construction of Phase 4C of the Moncton Campus;
  • changes to its growing and harvesting methodologies, design improvements and environmental enhancements of the Moncton Campus;
  • continued investment in automation which will drive cost efficiencies and reduce dependence on manual labor;
  • continued investment in the Edison brand, including product innovations across multiple categories and increased investment in building brand equity within the premium segment;
  • launching additional innovative product with expected attractive long-term margin profiles;
  • and the addition of the Laurentian portfolio of products.

Stock Performance

Organigram is a constituent in the munKNEE Pure-Play Canadian LP Pot Stock Index and it is DOWN -15.4% YTD and DOWN -77.6% from its calendar 2021 high.