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Organigram Holdings Inc. (NASDAQ: OGI) (TSX: OGI) released its results for the third quarter ending May 31, 2021, with revenue growing 31% over last year to $29.1 million. This was an increase of 51% from the second quarter. The net loss fell 96% to just $4 million from last year’s $89 million. The stock was trading higher by 6% in early trading and was lately selling at $2.83. Organigram attributed the increase in revenue to higher adult-use recreational net revenue and higher wholesale revenue (from other licensed producers) in the quarter. Last year’s third quarter adult-use recreational net revenue was reduced by a provision for product returns and pricing adjustments of $3.0 million (net of excise) of which the majority was largely due to slow-moving oil and certain flower products. “We are pleased with the growth in revenue in Q3 as we were better staffed to fulfill the demand for our revitalized product portfolio, which continues to resonate well with consumers,” said Paolo De Luca, Chief Strategy Officer. “The ongoing investment in our genetics and cultivation program has yielded some exciting new dried flower products with more genetics and derivative product launches planned for the near term. Sales are trending higher to date in Q4 supported by a strong outlook for the industry as the number of cannabis retail stores continues to grow and existing stores are permitted to re-open their doors to customers.” The cost of sales decreased from last year and this was primarily due to almost $30.0 million in inventory write-offs and provisions as well as charges related to a reduced workforce due to COVID-19 which were all incurred in the third quarter of 2020. SG&A increased over last year and Organigram said this was largely due to increased staffing and office costs related to the establishment of the CoE as well as the EIC acquisition, higher cultivation related research and development costs as well as higher audit fees (in connection with the company’s regulatory requirement to obtain an integrated audit opinion for the first time for its Fiscal 2021 annual financial statements). Outlook Organigram said it currently expects fourth-quarter 2021 revenue to be higher than the third quarter largely due to stronger forecasted market growth as COVID-19 restrictions lift (permitting cannabis retail stores to reopen to foot traffic) and the number of retail stores continuing to grow. The company said it is better able to fulfill the demand for its revitalized product portfolio with increased staffing. In a statement, the company said, “Revenues to date and purchase orders received from customers support the company’s expectation of revenue growth from Q3 2021 to Q4 2021; however actual results could vary from estimates from the date hereof until year-end.In addition, the company expects to generate a new and incremental revenue stream from the first sales of soft chews expected in Q4 2021.” Solid Financials On April 1, 2021, Organigram repaid all outstanding balances (approximately $58.5 million) under its credit agreement with BMO and a syndicate of lenders, which will result in annual interest savings of $2.7 million.Currently, the company has $222 million in cash and short-term investments (including restricted funds).Organigram believes it has sufficient cash and short-term investments to support its current plans, including the budget of $38 million for the completion of Phase 4C and the Moncton Campus design improvements, and to also support the corresponding growth to its working capital assets and still maintain sufficient liquidity and financial flexibility. Organigram Forecasts Higher Revenue As COVID Restrictions Llift on Green Market Report. -

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