Organigram Q4 Financial Results: Record Net Revenue; Positive Adjusted EBITDA

Image source

Organigram Holdings Inc. (Nasdaq: OGI) (TSX: OGI), a licensed producer of cannabis and a constituent in the Canadian Cannabis LP Index, announced its results for Q4 of FY2022 ended August 31st, 2022, today as follows:

Q4 Financial Highlights

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

• Net Revenue: increased 19.3% to $45.5.8M
• Adj. Gross Margin $: increased 35.6% to $10.4M
  • as a % on Net Revenue: declined to 23% from 24% 
• Sales, General & Admin.: declined 67.6% to $14M
• Adj. EBITDA: improved to $3.2M from $583
• Net Profit (Loss): loss increased 123.7% to $(6.1)M 
• Cash on Hand: $99M

Management Commentary

Derrick West, Chief Financial Officer, said:

• “We are pleased with record net revenue and the third consecutive quarter of positive Adjusted EBITDA achieved in Q4 Fiscal 2022. This is a reflection of our disciplined approach, the execution by our team and our success at integrating acquisitions.
• We enter Fiscal 2023 well-capitalized and with a proven strategy to continue to generate shareholder value.”

Fiscal 2023 Outlook

• Net revenue
  • expects Fiscal 2023 revenue to be higher than that of Fiscal 2022 due to:
    • ongoing sales momentum,
    • stronger forecasted market growth,
    • expanded product line in multiple segments,
    • greater capacity to meet demand at the Moncton Campus,
    • increased throughput at the Winnipeg facility,
    • contributions from the Lac-Supérieur facility,
    • a new multi-year agreement with Canndoc in Israel  that contemplates shipping up to 20,000 kilograms of dried flower,
    •  and the anticipated continuation of shipments to Cannatrek and Medcan in Australia 
  • all based on larger harvests. 
• Adjusted gross margins
  • has identified the following opportunities which it believes have the potential to further improve adjusted gross margins over time:
    • increased economies of scale and efficiencies as a result of moving from an annual capacity of 45,000 to 85,000 kilograms of dry flower at the Moncton facility, 
    • enhanced growing and harvesting methodologies, and design and environmental improvements, which have resulted in higher-quality flower and improved yields,
    • expansion of the Lac-Supérieur facility which is expected to increase capacity for annual hash production from 1 million to over 2 million units,
    • continued investment in automation at all three sites, which will drive cost efficiencies and reduce dependence on manual labor,
    • revitalization of the Edison brand, including product innovation, packaging and post harvest processing,
    • increased investment in building brand equity within the premium segment, geared toward securing higher margins and
    • additional innovative product launches to support other key brands, SHRED, Monjour, Holy Mountain and Tremblant, to create new potential avenues for growth, and
    • full-year margin contribution from the Laurentian acquisition.
• Adjusted EBITDA
  • expects significant growth in Adjusted EBITDA.
• Cash flow
  • expects to have positive cash flows from operating activities during Fiscal 2023 and positive free cash flows during calendar 2023.

Stock Performance

Organigram's stock price declined 11.2% during Q4 and has declined 2.9% since then and is now DOWN 42,9% YTD.

---

More By This Author:

Your Choice: Invest In LEGR (+9%) OR Bitcoin/Ethereum (-20%)
Infrastructure Bill Beneficiaries Index Continues To Outpace The S&P 500
Cannabis Category Performances Last Week Ranged From +5.2% To -2.3%