- \n
- 17% growth in net revenue to $42.7 million year-over-year<\/i><\/li>\n
- $2.3 million growth in international sales year-over-year<\/i><\/li>\n
- Adjusted EBITDA1<\/sup> of $1.4 million versus $0.1 million in the prior year period<\/i><\/li>\n
- Completed acquisition of Motif to become recreational cannabis market leader in Canada<\/i><\/li>\n
- Launched Edison Sonics with proprietary <\/i>FAST\u2122 nanoemulsion technology, clinically validated to have up to 50% faster onset and nearly 2x impact of cannabinoids at peak<\/i><\/li>\n
- Strong balance sheet with negligible debt, and a pro-forma cash position of $113 million2<\/sup><\/i><\/li>\n<\/ul>\n
TORONTO–(BUSINESS WIRE<\/a>)–
\nOrganigram Holdings Inc. (NASDAQ: OGI) (TSX: OGI), (the \u201cCompany\u201d or \u201cOrganigram\u201d), a leading licensed producer of cannabis, announced its results for the first quarter ended December 31, 2024 (\u201cQ1 Fiscal 2025\u201d). The Q1 Fiscal 2025 results include the financial results of Motif Labs Ltd. (“Motif”) from December 6, 2024 to December 31, 2024, following the Company’s acquisition of Motif.<\/p>\nQ1 FISCAL 2025 HIGHLIGHTS<\/b><\/p>\n
- \n
- \nNet revenue increased 17% to $42.7 million from $36.5 million in the same prior year period.<\/p>\n<\/li>\n
- \nInternational sales increased $2.3 million versus the same prior year period.<\/p>\n<\/li>\n
- \nAdjusted gross margin1<\/sup> increased to $14.3 million or 33%, from $11.2 million or 31% in the same prior year period.<\/p>\n<\/li>\n
- \nAdjusted EBITDA1<\/sup> increased to $1.4 million from $0.1 million in the same prior year period.<\/p>\n<\/li>\n
- \nPro-forma cash position of approximately $113 million2 <\/sup>and negligible debt.<\/p>\n<\/li>\n
- \n21% of harvests came from higher efficiency seed-based cultivation, up from 9% in the prior quarter.<\/p>\n<\/li>\n
- \nIntegration of Motif progressing as planned, with over $10 million in annual run-rate synergies expected to be realized within the next 24 months.<\/p>\n<\/li>\n
- \nFlagship brands SHRED and BOXHOT reached over $385 million in retail sales over last 12 months3<\/sup>.<\/p>\n<\/li>\n
- \n#1 market position in Canada holding the #1 position in vapes, #1 in pre-rolls, #1 in milled flower, #1 in hash, #1 in pure CBD gummies, #3 in edibles, #3 in dried flower3<\/sup>.<\/p>\n<\/li>\n<\/ul>\n
\n“This is an exciting time for Organigram as we kick off Fiscal 2025 as Canada’s largest recreational cannabis company by market share,” said Beena Goldenberg, Chief Executive Officer. “Our strategic priorities for the fiscal year focus on integrating Motif to maximize operational synergies, continuing to expand our presence in international markets, and driving even more innovation\u2014both in our product portfolio to delight our consumers, and also within our operations to enhance value for our shareholders.”<\/p>\n
FIRST QUARTER FISCAL 2025 FINANCIAL OVERVIEW<\/b><\/p>\n
- \n
- \nNet revenue:<\/p>\n
- \n
- \nNet revenue increased 17% to $42.7 million, from $36.5 million in the first quarter ended December 31, 2023 (“Q1 Fiscal 2024”), primarily due to an increase in recreational cannabis sales and international sales, as well as contributions from Motif sales.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n
- \nGross margin:<\/p>\n
- \n
- \nCost of sales increased 6% to $28.6 million, from $26.9 million in Q1 Fiscal 2024, primarily driven by higher sales.<\/p>\n<\/li>\n
- \nAdjusted gross margin4<\/sup> was $14.3 million, or 33% of net revenue, compared to $11.2 million, or 31%, in Q1 Fiscal 2024. The increase is attributable to several factors, including lower cultivation and post-harvest costs, reduced inventory provisions, and sales mix.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n
- \nSelling, general & administrative (“SG&A”) expenses:<\/p>\n
- \n
- \nSG&A expenses increased 7% to $17.0 million from $15.9 million in Q1 Fiscal 2024. The increase was attributable to higher trade investments to support the growth of the business as well as expenses from Motif.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n
- \nNet loss:<\/p>\n
- \n
- \nNet loss was $23.0 million compared to a net loss of $15.8 million in Q1 Fiscal 2024. The increase in net loss from the prior period is primarily attributable to a higher fair value loss recognized in relation to top-up-rights of BAT, which was partially offset by an increase in gross margin and fair value gain on other financial assets.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n
- \nAdjusted EBITDA4<\/sup>:<\/p>\n
- \n
- \nAdjusted EBITDA was $1.4 million compared to $0.1 million in adjusted EBITDA in Q1 Fiscal 2024. The increase was primarily attributable to higher revenue and operational efficiency gains.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n
- \nNet cash used in operating activities before working capital changes:<\/p>\n
- \n
- \nNet cash used in operating activities was $6.3 million, compared to $8.1 million cash used in Q1 Fiscal 2024. The decrease was primarily attributable to higher adjusted gross margin4<\/sup> in Q1 Fiscal 2025.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
\n“Organigram’s year-over-year performance highlights the long-term benefits of our investments in efficiency, disciplined capital deployment, and market-leading research and innovation,” said Greg Guyatt, Chief Financial Officer. “With one of the strongest balance sheets in the industry, we look forward to showcasing the full impact of our consolidated Organigram-Motif earnings in Q2. In addition, the anticipated $41.5 million final BAT follow-on investment tranche, which is expected to close in late February, further strengthens our balance sheet and fuels our international expansion goals.”<\/p>\n
CANADIAN RECREATIONAL MARKET INTRODUCTIONS<\/b><\/p>\n
\nAs Canada’s market leader in recreational cannabis, Organigram remains committed to delivering consumer focused innovations and products to its customers. Some notable recent highlights include:<\/p>\n
Edison Sonics – 2 x 5mg THC gummies powered by Organigram’s FASTTM <\/sup>nanoemulsion technology, clinically validated to have up to 50% faster onset and result in nearly 2x higher cannabinoid concentration at peak compared to traditional gummies.<\/i><\/p>\n
SHRED’ems Max10 – A single count 10mg THC gummy available in three different flavours.<\/i><\/p>\n
SHRED Heavy Slims – 10 x 0.4g infused tube-style pre-rolls, rolled with 100% organic hemp paper.<\/i><\/p>\n
W\u00f4 L\u00e0 Black Cherry Punch – 3.5g buds grown in Quebec, for Quebec.<\/i><\/p>\n
SHRED Captain Kush Dartz – 10 x 0.4g indica tube-style pre-rolls, rolled with 100% organic hemp paper.<\/i><\/p>\n
RESEARCH AND PRODUCT DEVELOPMENT<\/b><\/p>\n
Product Development Collaboration (“PDC”)<\/i><\/p>\n
- \n
- \nOrganigram and BAT continue to work together through their PDC on new work streams to develop innovative technologies in the edible, vape and beverage categories in addition to new disruptive inhalation formats aimed at addressing the biggest consumer pain points that exist in the category today.<\/p>\n<\/li>\n
- \nThe first commercialized product resulting from PDC research is the Edison Sonics – gummies utilizing Organigram’s Fast Acting Soluble Technology (FASTTM<\/sup>).<\/p>\n<\/li>\n<\/ul>\n
Follow-on Strategic Investment from BAT and creation of “Jupiter” Strategic Investment Pool<\/i><\/p>\n
- \n
- \nOn November 6, 2023, Organigram announced a $124.6 million follow-on investment from BAT and the creation of “Jupiter”, a strategic investment pool designed to expand Organigram\u2019s geographic footprint and capitalize on emerging growth opportunities.<\/p>\n<\/li>\n
- \nThe first two $41.5 million tranches of the follow-on investment were closed in calendar 2024, with the final $41.5 million tranche expected to close in February 2025.<\/p>\n<\/li>\n<\/ul>\n
INTERNATIONAL INVESTMENTS & JUPITER STRATEGIC INVESTMENT POOL<\/b><\/p>\n
- \n
- \nOrganigram made its first significant European strategic investment to expand its presence in the European cannabis market with a $21 million investment in Sanity Group GmbH (“Sanity Group”), a leading German cannabis company. Our investment in Sanity Group was supported by an expanded supply agreement, making it one of our largest customers. Since the April 1, 2024 expansion of Germany\u2019s medical cannabis program, the market has grown at least 4x and continues to show strong growth potential. Sanity is uniquely positioned, having already submitted applications for adult-use recreational pilot projects in Berlin, Frankfurt, D\u00fcsseldorf, and Bremen. Approval is pending from the Institute of Food & Nutrition, which oversees the pilot projects.<\/p>\n<\/li>\n
- \nJupiter has also deployed US$2 million into Steady State LLC (d\/b\/a Open Book Extracts), a U.S.-based company specializing in hemp-derived cannabinoid ingredients.<\/p>\n<\/li>\n
- \nPrior to the establishment of Jupiter, Organigram had already made a US$7 million strategic investment in U.S.-based Phylos Bioscience Inc., a leader in seed-based technology. The Company achieved 21% of its cannabis harvest from seeds in Q1 Fiscal 2025, contributing to a reduction in cultivation costs and increased cultivation capacity. The Company expects to further leverage lower-cost seed-based technology over time.<\/p>\n<\/li>\n
- \nOrganigram is exploring additional U.S. and international investment opportunities that align with the Company’s strategy to establish itself as a global leader and enhance profitability, with the goal of delivering long-term shareholder value.<\/p>\n<\/li>\n<\/ul>\n
INTERNATIONAL SALES<\/b><\/p>\n
- \n
- \nOrganigram has supply agreements with partners in Germany, U.K., Australia and Israel and is evaluating additional global partnership opportunities.<\/p>\n<\/li>\n
- \nOrganigram’s investment in Sanity Group resulted in the expansion of their previous supply agreement. The agreement is expected to be further expanded upon Organigram receiving EU-GMP certification of its Moncton facility, expected in spring of 2025.<\/p>\n<\/li>\n
- \nIn Q1 Fiscal 2025, Organigram achieved $3.3 million in international sales and expects international sales to increase throughout fiscal year 2025.<\/p>\n<\/li>\n<\/ul>\n
BALANCE SHEET & LIQUIDITY<\/b><\/p>\n
- \n
- \nAs of December 31, 2024, the Company had cash (including restricted cash and short-term investments) of $71.2 million<\/p>\n<\/li>\n
- \nOn a pro-forma basis, Organigram will have a cash position of approximately $113 million5<\/sup> upon closing of the final tranche of BAT’s follow-on strategic investment.<\/p>\n<\/li>\n
- \nThe Company’s EU-GMP audit was completed in November 2024. If successful in obtaining certification, the Company expects its international sales to increase.<\/p>\n<\/li>\n<\/ul>\n
- \nNet cash used in operating activities was $6.3 million, compared to $8.1 million cash used in Q1 Fiscal 2024. The decrease was primarily attributable to higher adjusted gross margin4<\/sup> in Q1 Fiscal 2025.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
- \nSelling, general & administrative (“SG&A”) expenses:<\/p>\n
- \nAdjusted EBITDA1<\/sup> increased to $1.4 million from $0.1 million in the same prior year period.<\/p>\n<\/li>\n
- $2.3 million growth in international sales year-over-year<\/i><\/li>\n
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