Organigram Holdings (TSX: OGI) (NASDAQ: OGI) this morning reported its third quarter 2021 financial results. The firm reported gross revenue of $20.3 million, along with a net loss of $4.0 million for the three month period.
Net revenue grew substantially on a quarter over quarter basis, with the company seeing a 39% increase from the $14.6 million in revenues reported for the second quarter.
Despite this, the company still posted a negative gross margin before fair value adjustments, with the company seeing a gross loss of $3.1 million for the period. This however was bolstered by fair value changes of $5.2 million, bringing gross margins after adjustments to $2.1 million. This compares to a gross loss before adjustments of $16.5 million in the second quarter, and a gross margin after adjustments of $17.2 million.
Operating expenses meanwhile grew over the quarter, climbing from $12.1 million to $14.3 million. Expenses largely comprised of general and administrative at $9.5 million, and sales and marketing at $4.1 million. Total loss from operations amounted to $12.2 million during the quarter.
All was not lost however for the company, with the firm seeing the quarter bolstered slightly by a $7.3 million change in fair value of derivative liabilities, and a further $2.7 million in government subsidies that the Canadian taxpayer is on the hook for despite the company failing to post any semblance of a profitable operation. Total net loss for the three month period amounted to $4.0 million.
The company overall saw net cash of $10.8 million used during the quarter to support its operations. Despite this, net cash from financing activities amounted to $161.9 million, thanks largely in part to the company managing to rope British American Tobacco in as an investor during the quarter, while net cash used in investing activities totaled $153.9 million.
Overall, the company saw its cash position decline from $61.1 million in the second quarter to $58.4 million in the third quarter. This however was offset by short term investments, which grew from $10.0 million to $138.1 million over the course of the quarter. Total current assets grew from $132.3 million to $265.1 million.
Current liabilities meanwhile shrank from $19.9 million to $19.4 million, with accounts payable during the quarter growing from $13.8 million to $19.3 million.
Looking forward, the firm gave a vague outlook, stating that it expects fourth quarter revenues to be higher than third quarter revenues, along with an improvement in gross margins. The company however indicated that it expects S&A to grow in the fourth quarter, likely offsetting such gross margin gains.
Organigram Holdings last traded at $3.28 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.
