Net revenue

Organigram records highest quarterly net income in first quarter

Organigram Holdings Inc OGI posted net sales of $ 30.4 million in the first quarter of fiscal 22, the highest quarterly net sales in company history with sequential growth of 22% and 57% year-on-year.

  • The increase is mainly due to increased recreational income for adults and international income, partially offset by lower average selling price due to product mix and lower medical income.
  • Fiscal 22 first quarter cost of sales increased 20% to $ 27.9 million, primarily due to higher sales volume in the adult entertainment market.
  • Adjusted gross margin improved to $ 5.5 million, or 18% of net sales, compared to $ 1.9 million, or 10% last year.
  • The improvement is largely due to the reduction in cultivation costs partially offset by a shift in the sales mix towards lower priced products and brands with lower ASP.
  • The company posted a narrower Adjusted EBITDA loss of $ (1.9) million compared to $ (5.7) million a year ago.
  • The net loss for the quarter also decreased to $ (1.3) million from a loss of $ (34.3) million a year ago.
  • The decrease in losses is attributable to a higher gross margin and fair value adjustments on biological assets and inventory sold.
  • Free cash flow used in operating activities was $ 9.3 million.
  • Outlook: Organigram currently anticipates second quarter net sales significantly higher than the previous year and expects a sequential improvement in adjusted gross margins in the second quarter.
  • Price action: OGI shares are trading 5.78% at $ 1.83 in the pre-market session last check Tuesday.

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