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Organigram Holdings Inc. (NASDAQ:OGI) (TSX:OGI) released its results for the third quarter ended May 31, 2023, revealing net revenue decreased 14% to CA$32.8 million ($25 million), from CA$38.1 million in Q3 fiscal 2022.
Q3 Fiscal 2023 Financial Highlights
Gross loss was CA$4.7 million compared to gross profit of CA$7.6 million in Q3 fiscal 2022.
Net loss was CA$213.5 million, compared to a net loss of CA$2.8 million in Q3 fiscal 2022.
Adjusted EBITDA was negative CA$2.9 million compared to positive CA$583,000 in Q3 fiscal 2022.
On May 31, 2023, the company had unrestricted cash of CA$53 million and restricted cash of CA$22 million for a total of CA$75 million.
“Our results for the third quarter of fiscal 2023 were impacted by a reduction in sales in two of our higher margin categories of international sales and ingestible extracts," stated Derrick West, CFO. "Further, to address the impact of THC inflation, which forced us to adjust our pricing to remain competitive, we intentionally accelerated adjustments to growing conditions to increase whole flower THC levels to meet consumer demand. This temporarily reduced our flower yields, negatively impacting our margins on all flower categories. In the last month of the quarter, we returned to above average yields while maintaining increased whole flower THC levels. We believe that based on this progress we will return to positive adjusted EBITDA in Q4 Fiscal 2023.”
Outlook
Organigram currently expects Q4 fiscal 2023 net revenue to be higher than that of Q3 fiscal 2023.
The company expects to achieve positive adjusted EBITDA in Q4 fiscal 2023.
While the company expects to resume generating positive adjusted EBITDA, periods when the company achieves significant increases to sales will result in increases to receivables and this will negatively impact cash from operating activities. The company forecasts a remaining cash capex spend of approximately CA$10 million for fiscal 2023 and if completed as planned during fiscal 2023, the company expects to generate positive free cash flows by the end of calendar 2023.
Price Action
Organigram shares were trading 12.91% lower at $1.6895 during Friday's pre-market session.
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