Canada NewsWire
MONCTON, NB, April 15, 2019
MONCTON, NB, April 15, 2019 /CNW/ - Organigram Holdings Inc. (TSX VENTURE: OGI) (OTCQX: OGRMF), the parent company of Organigram Inc. (the "Company" or "Organigram"), a leading licensed producer of cannabis, is pleased to announce its results for the second quarter ended February 28, 2019 ("Q2" or "Q2 2019"). The Q2 2019 includes the first full quarter of adult-use recreational sales for the Company.
"We executed very well again this quarter and have established Organigram as one of the leaders in the Canadian adult-use recreational market," said Greg Engel, Chief Executive Officer.
"For the second consecutive quarter, our results reflected operational excellence which translated into record revenue for the Company, industry-leading adjusted gross margin, and positive adjusted EBITDA, all of which differentiates us from most of the Canadian industry today. Our team has already progressed several key initiatives in preparation for the derivative and edibles launch in the fall of 2019. We are excited about the significant growth ahead expected from these new products, our expanding capacity, our strategic partnerships, and our relentless focus on continuous improvement to consistently deliver high quality product to our customers."
Select Highlights for the Second Quarter of Fiscal 20192
Significant Events
Phase 4 Production Expansion
Phase 5 Expansion Under Refurbishment
Adult-Use Recreational Launch 2.0 –Derivative and Edible Products
Balance Sheet
Financial Highlights
(in $000s except for per share amounts) | |||||
Q2-2019 | Q2-2018 | % Change | |||
Gross revenue | $ | 33,473 | $ | 2,926 | 1,044% |
Sales recovery (returns) | - | 469 | (100)% | ||
Excise taxes | (6,539) | - | n/m | ||
Net revenue | 26,934 | 3,395 | 693% | ||
Cost of sales (incl. indirect production) | 10,890 | 1,624 | 571% | ||
Gross margin (excluding FV adjustment)1 | 16,044 | 1,771 | 806% | ||
FV adjust on bio assets and inventories | (8,086) | 4,384 | (284)% | ||
Gross margin | 7,958 | 6,155 | 29% | ||
General and administrative | 2,603 | 1,734 | 50% | ||
Sales and marketing | 3,138 | 934 | 236% | ||
Share-based compensation (non-cash) | 3,985 | 1,154 | 245% | ||
Total expenses | 9,726 | 3,822 | 154% | ||
Income (loss) from continuing | (1,768) | 2,333 | (176)% | ||
Net financing costs, investment (income) | 5,238 | 1,143 | 358% | ||
Income tax recovery | (620) | - | n/m | ||
Net income (loss) from continuing | (6,386) | 1,190 | (637)% | ||
Loss from discontinued operations | - | (114) | n/m | ||
Net income (loss) and comprehensive | $ | (6,386) | $ | 1,076 | (693)% |
Net income (loss) from continuing | $ | (0.049) | $ | 0.010 | |
Net income (loss) from continuing | $ | (0.049) | $ | 0.009 | |
(in $000 except for per share amounts) | February 28, 2019 | August 31, 2018 | % | ||
Cash and short-term investments | $ | 63,359 | $ | 130,064 | (51)% |
Biological assets | 19,835 | 19,858 | 0% | ||
Inventories | 95,134 | 44,969 | 112% | ||
Other current assets | 29,416 | 8,323 | 253% | ||
Property, plant and equipment | 153,282 | 98,639 | 55% | ||
Other non-current assets | 15,124 | 714 | 2,018% | ||
Total assets | $ | 376,150 | $ | 302,567 | 24% |
Current liabilities | $ | 66,428 | $ | 11,250 | 490% |
Non-current liabilities | 32,838 | 106,723 | (69)% | ||
Total liabilities | 99,266 | 117,973 | (16)% | ||
Shareholders' equity | 276,884 | 184,594 | 50% | ||
Total liabilities and shareholders' equity | $ | 376,150 | $ | 302,567 | 24% |
Capital Structure
Feb 28, 2019 | Aug 31, 2018 | |||
(in $000s) | ||||
Current and long-term debt | $ | 12,947 | $ | 3,298 |
Convertible debentures (face value) | 49,332 (53,653) | 95,866 (112,982) | ||
Shareholders' equity | 276,884 | 184,594 | ||
Total debt and shareholders' equity | $ | 339,163 | $ | 283,758 |
(in 000s) | ||||
Outstanding shares | 139,569 | 125,208 | ||
Options | 8,292 | 7,710 | ||
Warrants | 5,836 | 8,087 | ||
Restricted share units | 940 | 145 | ||
Convertible debentures (converted at $5.42) | 9,899 | 20,845 | ||
Fully-diluted shares | 164,535 | 161,995 | ||
During the quarter, approximately $44.4 million of face value of debentures were converted into common shares of the Company at a conversion price of $5.42, leaving approximately $53.7 million of the face value of debentures outstanding. Subsequent to quarter-end, the remaining face value of debentures outstanding were converted into common shares at a conversion price of $5.42 per share, leaving $nil face value of debentures outstanding.
Outstanding share count as at April 12, 2019 is as follows:
(in 000s) | |
Outstanding shares | 151,844 |
Options | 8,272 |
Warrants | 3,835 |
Restricted share units | 1,024 |
Fully-diluted shares | 164,974 |
Second Quarter Fiscal 2019 Conference Call
The Company will host a conference call to discuss Q2 2019 earnings results. The details are as follows:
Date: | April 15, 2019 |
Time: | 8:00 a.m. Eastern Time |
Toll Free (North America) Dial-In Number: | 1-888-231-8191 |
International Dial-In Number: | 647-427-7450 or 778-371-9827 |
Webcast: https://event.on24.com/wcc/r/1976562/F9C96D11DAF178EB80B684B2404ADD3F |
A telephone replay of this conference call will be available shortly after the call's completion until April 22nd, 2019. To access the recording, use the following dial-in number 1-855-859-2056 and conference ID 1387326. A replay of the webcast will be available at the conclusion of the call at the aforementioned webcast link and on the Company's investor relations website at https://www.organigram.ca/investors/ and will be archived for a period of 90 days following the call.
About Organigram Holdings Inc.
Organigram Holdings Inc. is a TSX Venture Exchange listed company whose wholly owned subsidiary, Organigram Inc., is a licensed producer of cannabis and cannabis-derived products in Canada.
Organigram is focused on producing the highest-quality, indoor-grown cannabis for patients and adult recreational consumers in Canada, as well as developing international business partnerships to extend the company's global footprint. Organigram has also developed a portfolio of adult use recreational cannabis brands including The Edison Cannabis Company, Ankr Organics, Trailer Park Buds and Trailblazer. Organigram's primary facility is located in Moncton, New Brunswick and the Company is regulated by the Cannabis Act (Canada) and the Cannabis Regulations (Canada).
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release contains forward-looking information. Forward-looking information, in general, can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "could", "would", "might", "expect", "intend", "estimate", "anticipate", "believe", "plan", "continue", "budget", "schedule" or "forecast" or similar expressions suggesting future outcomes or events. They include, but are not limited to, statements with respect to expectations, projections or other characterizations of future events or circumstances, and the Company's objectives, goals, strategies, beliefs, intentions, plans, estimates, projections and outlook, including statements relating to the Company's plans and objectives, or estimates or predictions of actions of customers, suppliers, partners, distributors, competitors or regulatory authorities; and, statements regarding the Company's future economic performance. These statements are not historical facts but instead represent management beliefs regarding future events, many of which, by their nature are inherently uncertain and beyond management control. Forward-looking information has been based on the Company's current expectations about future events.
Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual events to differ materially from current expectations. Important factors - including the availability of funds, consummation of due diligence and definitive documentation, the receipt of regulatory approvals or consents, the completion of regulatory processes and registrations, unforeseen construction delays, competitive and industry conditions, customer buying patterns and crop yields - that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time on SEDAR including the Company's Annual and Q2 MD&A and AIF (see www.sedar.com). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release. The Company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
This news release refers to certain financial performance measures that are not defined by and do not have a standardized meaning under International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. These non-IFRS financial performance measures are defined in the MD&A. Non-IFRS financial measures are used by management to assess the financial and operational performance of the Company. The Company believes that these non-IFRS financial measures, in addition to conventional measures prepared in accordance with IFRS, enable investors to evaluate the Company's operating results, underlying performance and prospects in a similar manner to the Company's management. As there are no standardized methods of calculating these non-IFRS measures, the Company's approaches may differ from those used by others, and accordingly, the use of these measures may not be directly comparable. Accordingly, these non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
_______________________________________________ 1 Adjusted gross margin and adjusted EBITDA are non-IFRS measures that are not defined by and do not have any standardized meaning under IFRS; please see the Company's Q2 2019 Management's Discussion and Analysis ("MD&A") for definitions and calculations. The Company adjusted the calculation of adjusted EBITDA in Q2 2019 to add back share-based compensation per the Company's Q2 2019 Condensed Consolidated Interim Statement of Cash Flows. Using this new methodology, the Q1 2019 adjusted EBITDA would equal 55% compared to 40% under the old methodology. 2 Financial figures relating to 2018 have been restated due to the reclassification of discontinued operations and the reclassification of shipping expense from selling and marketing expense to cost of sales. 3 Cash cost of cultivation per gram of dried flower harvested is a non-IFRS measure that are not defined by and does not have any standardized meaning under IFRS; please see the Company's Q2 2019 MD&A for definitions and calculations. Cash cost of cultivation excludes significant post-harvest costs including but not limited to extraction, packaging and shipping which need to be added to arrive at cost of sales when inventory is sold. 4 703454 N.B. Inc. 5 The forward-looking estimates of additional production capacity and costs related thereto are based on a number of material factors and assumptions. Please see the Company's Q2 2019 MD&A. 6 The Company has no investment or ownership in any entity in the United States nor does it provide any products or services to entities in the United States.
SOURCE OrganiGram
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