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Organigram Holdings Inc. (Nasdaq: OGI) (TSX: OGI), the parent company of Organigram Inc., a leading licensed producer of cannabis, announced its results for the fourth quarter (Q4) ended August 31, 2021 yesterday 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 +22.3% to $24,865M
• Adj. Gross Margin $: increased to $3,017M from $(722)
  • as a % on Net Revenue: increased to 12% from -4% 
• Adj. Gross Margin %: increased to 30% 
• Sales, General & Admin.: No Change
  • Adj. EBITDA: improved by 48% to $(4,818)M
• Net Profit (Loss): increased by 54.8% to $(25,971)M

Q4 Operational Highlights

• Achieved a 7% share of market in the recreational cannabis market in Q4, up from 5.4% in Q3 2021, positioning Organigram as the #4 licensed producer and the momentum continues with a 7.9% share of market as of October.

Management Outlook

• Net revenue
  • expects Q4 2021 revenue to be higher than Q3 2021
  • expects to generate a new and incremental revenue stream from the first sales of soft chews expected in Q4 2021
  • expects resumption of shipments to Canndoc in Israel to generate higher sequential revenue in Q1 Fiscal 2022
  • Revenues to date in Q1 Fiscal 2022 support the Company’s expectation of revenue growth from Q4 Fiscal 2021 to Q1 Fiscal 2022; however actual results could vary from estimates from the date hereof until year-end.

• Adjusted gross margins

  • expects to begin to see a sequential improvement in adjusted gross margins in Q1 Fiscal 2022 and has put in place measures that it expects will further improve margins over time dependent on, but not limited to, product category and brand sales mix, as follows:

    • Economies of scale and efficiencies gained as it continues to scale up cultivation, 
    • Changes to its growing and harvesting methodologies and design improvements and environmental enhancements, 
    • Higher margin international sales are expected to represent a greater proportion of the Company's revenue,
    • More sales from 1g Edison vape cartridges that generally attract higher margins;
    • Continued investment in automation which will drive cost efficiencies and reduce dependence on manual labor,
    • Price increases to SHRED’s pre-milled flower SKUs,
    • Attractive long-term margin profiles with the recent launches of new products such as Edison Jolts (ingestible extracts), SHRED'ems and  Monjour 

• SG&A Expenses
  • Q1 Fiscal 2022 SG&A is expected to be similar to Q4 Fiscal 2021. 

• International

  • Shipments to Canndoc Ltd., which resumed during Q1 Fiscal 2022, are expected to continue during Fiscal 2022

  • Recent political changes and cannabis election ballot initiatives for medical and recreational use in the United States suggest that the potential movements to U.S. federal legalization of cannabis (THC) have increased momentum, but the timing and outcome remain difficult to predict. Organigram continues to monitor and develop a potential U.S. THC strategy and evaluate CBD entry opportunities in the United States.

• Liquidity and Capital Resources

  • On August 31, 2021, the Company had unrestricted cash and short-term investments balance of $184 million which it believes is sufficient liquidity for the near to medium term.

Stock Performance

Since the end of Q4 (August 31st) Organigram's stock price has declined 23.7% but is still UP +50.4% YTD.