Organigram Provides Corporate Update
Organigram Holdings Inc. (NASDAQ: OGI) (TSX: OGI), the parent company of Organigram Inc. (the “Company” or “Organigram”), a leading licensed producer of cannabis, provided a corporate update today and announced details for its fiscal fourth quarter ended August 31, 2019 (“Q4 2019”) and full year 2019 conference call. The Company is scheduled to report its fourth quarter and full year earnings results for its fiscal year ended August 31, 2019 on Monday, November 25, 2019 before market open.
Fiscal Fourth-Quarter and Full Year 2019
For the fiscal full year 2019, the Company expects to report year-over-year growth in net revenue of approximately 547% to about $80.4 million as well as positive adjusted EBITDA for the year. Net revenue (after excise taxes) for Q4 2019 is expected to be approximately $16.3 million, which reflects about $20.0 million of shipments in the quarter and about $3.7 million in provisions for product returns and pricing adjustments. Lower Q4 2019 net revenue (compared to third quarter net revenue of approximately $24.8 million) and about $1.6 million of packaging and inventory adjustments (charged to cost of sales) in the quarter are expected to contribute to negative adjusted EBITDA for Q4 2019.
For Q4 2019, the Company also expects to report sequential improvement in the cost of cultivation per gram and overall harvested volume as its yield per plant returned to normalized levels following a temporary decline in the third quarter of fiscal 2019 (“Q3 2019”). As first discussed in its third quarter earnings report, the cannabinoid content in Organigram’s harvested flower and sweet leaf has continued to reach all-time highs and the Company has identified what it views as an optimal balance of high yields and high cannabinoid content.
“While Q4 2019 did not meet our overall expectations, we have not only emerged as one of the national leaders in the industry with significant growth expected in net revenue and strong market share, we expect to report positive adjusted EBITDA for the year,” said Greg Engel, CEO. “And we remain relentlessly focused on running a profitable business which earns attractive returns on investment for our shareholders over the near and long term. We are encouraged by Ontario’s recent announcement to expand the retail network and believe this should be an important catalyst to drive further growth for us and the industry as a whole.”