Agreed, OGI has bottomed. FUNMAN is going to be prudent, watching for a PPS retracing for more opportunities to add on higher lows.
We've definitely seen the bottom.
I may miss out, but the euphoria won't last forever. Maybe not past noon today even :-(
Unfortunately, the whole cannabis sector reacts in sympathy to the latest big ER. I had a wildly fantastic day yesterday. I was all smiles as you were too.
If any of the other big guys disappoint, then the better companies will go on sale.
Organigram Stock Skyrockets Following Strong Q1 Earnings, Here’s Why OGI Stock Has Officially Bottomed
JANUARY 15, 2020
RYAN T.
Organigram’s Q1 Net Revenue Jumped 102% Lifting Shares of OGI Stock 44% Today While Pot Stocks Across the Board Soared
This Reliable Technical Indicator Signalled the Reversal of OGI’s Downtrend 2 Days Ago
Organigram Holdings (TSX: OGI) (NASDAQ: OGI) (FRA: 0OG) announced earnings for the first quarter ended November 30, 2019, yesterday after the closing bell. The company reported strong revenue growth which included Gross Revenue of $28.45 million, up 96% over the previous year. Q1 2020 Net Revenue was $25.2 million, up 102% from the $12.4 million recorded in Q1 2019.
Gross Margin for the first-quarter 2020 was $11.2 million, down from the $51.7 million posted last year. The company cited a year over year decrease in its non-cash fair value gain on biological assets and inventories sold from $42.9 million in Q1 2019 to $1.9 million in Q1 2020.
Organigram reported Gross Margin Before Fair Value Changes to Biological Assets and Inventories Sold of $9.3 million or 37% of net revenue for the first quarter 2020 compared to last year’s $8.8 million or 71% of net revenue.
Adjusted EBITDA declined 29% year over year from $6.8 million to $4.9 million in Q1 2020. The company blamed a rise in SG&A costs for the drop in Adjusted EBITDA. SG&A Costs for Q1 2020 more than doubled to $9.4 million compared to $4.5 million last year as the company ramped up for adult-use legalization in Canada.
Organigram reported a Q1 2020 Net Loss of $0.9 million or $0.006 per fully diluted share. In the first quarter of 2019, the company posted net income of $29.5 million or $0.195 per share which was mostly a result of its non-cash fair value changes to biological assets and inventories sold.
At the end of Q1 2020, Organigram had $34.1 million in Cash and Cash Equivalents. The company also reported having roughly $84.5 million in Current and Long-Term Debt at the end of Q1 2020. Much of the company’s debt is connected to its BMO Credit Facility which as of yesterday, still had $30 million in available funds. Organigram also has access to an additional $25 million in capital via a Revolver Loan that can be drawn down against specified receivables.
“Despite ongoing industry challenges, we are pleased with solid Q1 2020 results and our return to positive adjusted EBITDA during the quarter. Our team was also successful in shipping the first of our Rec 2.0 products as planned and on schedule in December of 2019. We also look forward to the launch of the remainder of our vape pen portfolio followed soon after by our premium cannabis-infused chocolate products. In addition to an exciting line-up of 2.0 products, we are rolling out a couple of new core strains, such as our high THC Edison Limelight, across the country following their success as limited-time-offers in smaller markets,” stated Organigram CEO Greg Engel.
Moving forward, Organigram is focused on continued expansion and the successful launch of the company’s Cannabis 2.0 line up of Edibles and vape pens. On December 17, 2019, the company shipped the first batch of its Trailblazer Torch vape cartridges and will follow that up by launching its Edison + Feather ready-to-go distillate pens and Edison + PAX ERA distillate cartridges in Q1 and Q2 2020.
Organigram is optimistic about the Canadian cannabis market and believes the industry is poised for strong growth as more retail stores are added in Canada’s largest province of Ontario as well as Quebec.
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