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.
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.