Revenues continue to decline for Organigram Holdings (TSX: OGI) (NASDAQ: OGI). The company this morning posted net revenues for the second quarter of 2021 of $14.6 million, a decline from the prior quarter and a miss on consensus estimates from analysts, while posting a net loss for the quarter of $66.4 million.
Revenues for the quarter fell substantially as a result of a number of employees testing positive for COVID-19, requiring the firms facility to close for certain periods during the quarter as per the company. The closure was a result of isolation requirements as well as deep cleaning requirements following the positive tests.
Things failed to get any better from here, with the company reporting just $14.6 million in net revenues, continuing the decline on a sequential basis, while also missing analyst consensus estimates of $20.21 million in revenues rather significantly. The quarter was also a miss on an adjusted EBITDA basis, with analysts expecting a figure of -$5.39 million, while the company instead posted a loss of -$8.64 million.
Cost of sales for the quarter meanwhile amounted to $31.1 million, marking the fourth straight quarter of negative gross margins for the firm at -$16.5 million, while leaving investors wondering what the go-forward path is for the company at this point in time. Operating expenses meanwhile totaled out to $12.1 million, largely consisting of general and administrative expenses of $8.0 million, and sales and marketing expenses of $3.1 million.
The loss was further enhanced by a further $37.7 million loss on the change in fair values of warrant liabilities and $0.8 million in financing costs. The company however did receive a bump from government subsidies of $2.7 million, before ultimately reporting a net loss of $66.4 million.
Looking to the balance sheet, the company saw its cash position fall to $61.1 million from $103.9 million during the quarter, while short term investments declined from $30.0 million to $10.0 million. Receivables also declined, falling from $12.8 million to $10.6 million, while inventories fell from $49.2 million to $37.3 million. Total current assets overall fell from $208.4 million to $132.3 million.
Accounts payable and accrued liabilities also fell however, dropping from $17.1 million to $13.8 million, while the current portion of long term debt fell from $61.1 million to $6.0 million. Overall, total current liabilities fell from $78.3 million to $19.9 million.
Notably, subsequent to the end of the quarter the firm saw a $221 million strategic investment from BAT, more commonly known as British American Tobacco. The company also repaid $58.5 million in outstanding debt under term loan facilities, which we suspect was a result of BMO calling its loan.
Organigram Holdings last traded at $3.50 on the TSX.
Information for this briefing was found via Sedar and Organigram Holdings. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.