Organigram Q4 Revenue Grows 83% YoY, Provides Outlook

Organigram Holdings Inc. OGI OGI released its results for the fourth quarter and year ended August 31, 2022, revealing net revenue in FY 2022 increased 84% to $145.8 million from $79.2 million in the previous year primarily due to an increase in recreational and international revenue, partially offset by a decrease in medical sales.

Q4 and Fiscal 2022 Financial Highlights

• Net revenue increased 83% to $45.5 million in Q4 2022, from $24.9 million in Q4 fiscal 2021.

• Gross margin before fair value changes to biological assets, inventories sold, and other charges:

• • Q4 fiscal 2022 margin improved to $8.8 million from negative $1.0 million in Q4 fiscal 2021.

  • In fiscal 2022, margin improved to $26.8 million from negative $24.4 million in fiscal 2021.

• Adjusted EBITDA:

• • Q4 fiscal 2022 adjusted EBITDA was $3.2 million compared to negative $4.8 million in Q4 fiscal 2021.

  • Adjusted EBITDA was $3.5 million for fiscal 2022, compared to negative $27.6 million in fiscal 2021.

• Net loss:

  • Q4 fiscal 2022 net loss was $6.1 million, compared to a net loss of $26.0 million in Q4 fiscal 2021.

  • In fiscal 2022, net loss was $14.3 million, compared to $130.7 million in fiscal 2021.

• On August 31, 2022, the company had unrestricted cash and short-term investments balance of $99 million compared to $184 million at August 31, 2021. The decrease in cash of $85 million was the result of the following: $49 million invested in capital expenditures across three facilities, $8 million in cash consideration towards the acquisition of Laurentian Organics Inc., $3 million investment into Hyasynth Biologicals with the balance related to supporting the increase in the working capital assets.

"In fiscal 2022, our innovative product launches, comprehensive retail distribution, sales execution, and operational excellence helped Organigram become a leading consumer products company in the cannabis sector," stated Beena Goldenberg, CEO. "During the year, we increased and optimized production to meet consumer demand, drove market share gains nationally and solidified our position as serious competitors in several new categories. In fiscal 2023 we expect continued success as we build on the high recognition of our brands, our track record of innovation and our proven ability to execute.

Outlook

Organigram currently expects fiscal 2023 revenue to be higher than that of Fiscal 2022. This expectation is largely 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 contributions from the Lac-Supérieur facility. In addition, the anticipated continuation of shipments to Canndoc in Israel and Cannatrek and Medcan  in Australia is expected to generate higher sequential revenue in fiscal 2023 as compared to fiscal 2022. The company believes it is better equipped to fulfill demand in fiscal 2023 with larger harvests expected compared to fiscal 2022. In addition, on November 17, 2022, the company entered into a new multi-year agreement with Canndoc that contemplates shipping up to 20,000 kilograms of dried flower.

The company expects to see an improvement in adjusted gross margins in fiscal 2023 and has put measures in place that it expects will further improve margins over time. The overall level of fiscal 2023 adjusted gross margins versus fiscal 2022 will also be dependent on other factors, including product category and brand sales mix.

The company expects significant growth in adjusted EBITDA in fiscal 2023 over fiscal 2022.

The company expects to have positive cash flows from operating activities during fiscal 2023 and positive free cash flows during calendar 2023.

Price Action

Organigram shares were trading 5.05% higher at $1.04 per share, during Tuesday’s pre-market session.

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