Organigram Sees Revenues Grow To $38.1 Million In Q3

Organigram Holdings (TSX: OGI) appears to have finally begun to hit it stride, several years into the legal cannabis market. The firm this morning posted its third quarter financial results, and continues to see growth in revenues.

Revenue for the quarter ended May 31 amounted to $38.1 million on a net basis, versus $31.8 million in the prior quarter, and $20.3 million in the year ago period. The improvement is said to have come from the adult use segment.

Cost of sales meanwhile amounted to $29.4 million, resulting in gross margin before fair value adjustments of $8.7 million, versus $6.9 million in the prior quarter. Despite the significant improvement however, margins are still unable the cover operating expenses, which came in at $19.6 million for the period.

Expenses were lead by general and administrative expenses of $12.8 million, followed by sale and marketing of $4.7 million. Loss from operations as a result totaled $11.9 million. Fair value changes and other expenses however reduced the overall loss posted by the firm to just $2.8 million for the three month period. Adjusted EBITDA meanwhile was positive $0.6 million.

Looking to the balance sheet, the company continues to run a capital intensive operation, with cash and short term investments declining from $150.7 million to $127.3 million over the three month period. Current assets overall declined from $236.6 million to $227.8 million. Current liabilities meanwhile climbed from $47.0 million to $54.6 million.

“With our increased cultivation capacity and economies of scale from Phase 4C, and our investment in automation at all three of our manufacturing locations, we expect that both our adjusted gross and adjusted EBITDA margins will improve in Q4 and into Fiscal 2023,” stated Derrick West, CFO, on the results.

The company expects its Q4 results to post higher revenues due to sales momentum amongst other reasons, while adjusted gross margins are also expected to improve.

Organigram Holdings last traded at $1.38 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.

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