Organigram Reports Record Fourth Quarter and Full Year Fiscal 2022 Results
TORONTO , November 29 /Businesswire/ - Organigram Holdings Inc. (NASDAQ: OGI) (TSX: OGI), (the “Company” or “Organigram”), a leading licensed producer of cannabis, announced its results for the fourth quarter and year ended August 31, 2022 (“Q4 Fiscal 2022” or "Fiscal 2022").
"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," said Beena Goldenberg, Chief Executive Officer. "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.
Select Key Financial Metrics
|
Q4-2022 |
|
Q4-20213 |
|
% Change |
|
Fiscal 2022 |
|
Fiscal 20213 |
|
% Change |
|||||||
Gross revenue |
65,657 |
|
36,182 |
|
81 |
% |
209,109 |
|
109,859 |
|
90 |
% |
||||||
Excise taxes |
(20,177 |
) |
(11,317 |
) |
78 |
% |
(63,300 |
) |
(30,696 |
) |
106 |
% |
||||||
Net revenue |
45,480 |
|
24,865 |
|
83 |
% |
145,809 |
|
79,163 |
|
84 |
% |
||||||
Cost of sales |
36,718 |
|
25,867 |
|
42 |
% |
119,037 |
|
103,567 |
|
15 |
% |
||||||
Gross margin before fair value changes to biological assets & inventories sold |
8,762 |
|
(1,002 |
) |
974 |
% |
26,772 |
|
(24,404 |
) |
210 |
% |
||||||
Realized loss on fair value on inventories sold and other inventory charges |
(10,191 |
) |
(7,286 |
) |
40 |
% |
(35,204 |
) |
(35,721 |
) |
(1 |
)% |
||||||
Unrealized gain (loss) on changes in fair value of biological assets |
15,677 |
|
11,639 |
|
35 |
% |
40,001 |
|
31,726 |
|
26 |
% |
||||||
Gross margin |
14,248 |
|
3,351 |
|
325 |
% |
31,569 |
|
(28,399 |
) |
211 |
% |
||||||
Adjusted gross margin1 |
10,362 |
|
3,017 |
|
243 |
% |
33,390 |
|
3,563 |
|
837 |
% |
||||||
Adjusted gross margin %1 |
23 |
% |
12 |
% |
92 |
% |
23 |
% |
5 |
% |
360 |
% |
||||||
Selling (including marketing), general & administrative expenses2 |
15,657 |
|
12,415 |
|
26 |
% |
59,768 |
|
45,727 |
|
31 |
% |
||||||
Adjusted EBITDA1 |
3,232 |
|
(4,818 |
) |
167 |
% |
3,484 |
|
(27,643 |
) |
113 |
% |
||||||
Net loss |
(6,144 |
) |
(25,971 |
) |
76 |
% |
(14,283 |
) |
(130,704 |
) |
89 |
% |
||||||
Net cash used in operating activities |
(19,695 |
) |
(7,699 |
) |
156 |
% |
36,211 |
|
28,589 |
|
27 |
% |
||||||
1 Adjusted gross margin, adjusted gross margin % and Adjusted EBITDA are non-IFRS financial measures not defined by and do not have any standardized meaning under IFRS; please refer to “Non-IFRS Financial Measures” in this press release for more information.
|
||||||||||||||||||
Select Balance Sheet Metrics (in $000s) |
AUGUST 31,
|
AUGUST 31,
|
% Change |
||||
Cash & short-term investments (excluding restricted cash) |
98,607 |
183,555 |
(46 |
)% |
|||
Biological assets & inventories |
68,282 |
48,818 |
40 |
% |
|||
Other current assets |
54,734 |
28,242 |
94 |
% |
|||
Accounts payable & accrued liabilities |
40,864 |
18,952 |
116 |
% |
|||
Current portion of long-term debt |
80 |
80 |
— |
% |
|||
Working capital |
166,338 |
234,349 |
(29 |
)% |
|||
Property, plant & equipment |
259,819 |
235,939 |
10 |
% |
|||
Long-term debt |
155 |
230 |
(33 |
)% |
|||
Total assets |
577,107 |
554,017 |
4 |
% |
|||
Total liabilities |
69,049 |
74,212 |
(7 |
)% |
|||
Shareholders’ equity |
508,058 |
479,805 |
6 |
% |
|||
“We are pleased with record net revenue and the third consecutive quarter of positive Adjusted EBITDA achieved in Q4 Fiscal 2022. This is a reflection of our disciplined approach, the execution by our team and our success at integrating acquisitions,” added Derrick West, Chief Financial Officer. “We enter Fiscal 2023 well-capitalized and with a proven strategy to continue to generate shareholder value.”
Key Financial Results for the Fourth Quarter and Fiscal 2022
-
Net revenue:
- Compared to the prior period, net revenue increased 83% to $45.5 million, from $24.9 million in Q4 Fiscal 2021. The increase was primarily due to an increase in adult-use recreational revenue, partly offset by lower average net selling price (“ASP”) due to product mix and a decrease in medical revenue.
- For Fiscal 2022, net revenue 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.
-
Cost of sales:
- Q4 Fiscal 2022 cost of sales increased to $36.7 million, from $25.9 million in Q4 Fiscal 2021, primarily as a result of the increase in sales volume in the adult-use recreational market.
- For Fiscal 2022, cost of sales was $119.0 million, compared to $103.6 million in the previous year.
-
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. Quarterly and annual improvement were both positively impacted by higher net revenue, lower cost of production and a reduction in inventory provisions and unabsorbed overhead costs.
-
Adjusted gross margin5:
- Q4 Fiscal 2022 adjusted gross margin was $10.4 million, or 23% of net revenue, compared to $3.0 million, or 12%, in Q4 Fiscal 2021.
- In Fiscal 2022, adjusted gross margin was $33.4 million, or 23% of net revenue, compared to $3.6 million, or 5% in Fiscal 2021.
- The improvement in quarterly and annual results was largely due to higher overall sales volumes and improved efficiency, net of the impact of a lower average selling price.
-
Selling, general & administrative (SG&A) expenses:
- Q4 Fiscal 2022 SG&A expenses increased to $15.7 million from $12.4 million in Q4 Fiscal 2021.
- In Fiscal 2022, SG&A expenses increased to $59.8 million, compared to $45.7 million in Fiscal 2021.
- Annual SG&A expenses as a percent of net revenue has decreased from 57.8% to 40.9%.
- Both quarterly and annual increases were primarily due to acquisitions and the higher spend to support the growth in the business.
-
Adjusted EBITDA6:
- 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.
- The improvement in quarterly and annual results is primarily attributable to the increase in adjusted gross margins due to the higher volume of products sold and lower production costs.
-
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.
- The quarterly and annual decrease in net loss is primarily due to the increased revenues, lower production costs and a decrease in inventory provisions and unabsorbed overheads.
-
Net cash used in operating activities:
- Q4 Fiscal 2022 net cash used in operating activities was $19.7 million, compared to $7.7 million in Q4 Fiscal 2021.
- In Fiscal 2022, net cash used in operating activities was $36.2 million, compared to $28.6 million in Fiscal 2021.
- The year over year increase to cash used in operating activities is primarily due to the higher working capital needs resulting from the growth in revenues.
The following table reconciles the Company's Adjusted EBITDA to net income (loss).
Adjusted EBITDA Reconciliation
|
Q4-2022 |
Q4-2021 |
Fiscal 2022 |
Fiscal 2021 |
||||||||||||
Net loss as reported |
$ |
(6,144 |
) |
$ |
(25,971 |
) |
$ |
(14,283 |
) |
$ |
(130,704 |
) |
||||
Add/(Deduct): |
|
|
|
|
||||||||||||
Financing costs, net of investment income |
|
(364 |
) |
|
(286 |
) |
|
(1,058 |
) |
|
2,106 |
|
||||
Income tax expense (recovery) |
|
(299 |
) |
|
— |
|
|
(88 |
) |
|
— |
|
||||
Depreciation, amortization, and (gain) loss on disposal of property, plant and equipment (per statement of cash flows) |
|
7,570 |
|
|
17,349 |
|
|
31,487 |
|
|
33,459 |
|
||||
Impairment of intangible assets |
|
— |
|
|
1,701 |
|
|
— |
|
|
1,701 |
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