MONCTON, NEW BRUNSWICK–(Marketwired – April 12, 2016) – OrganiGram Holdings Inc. (TSX VENTURE:OGI)(OTCQB:OGRMF) (the “Company”) provides a preliminary synopsis of its 2nd quarter results.
Highlights from the financial results for the quarter include a 38% increase in revenue, a 14% improvement in gross margin percentage and the achievement of positive year-to-date (YTD) EBITDA and cash flow from operations. See further details below. The information detailed below is a preliminary review of our financial highlights. Full financial statements for the quarter ending February 29, 2016 are expected to be released April 25, 2016.
|Figures in CDN$||Quarter Ending February 2016 (Unaudited)||Quarter Ending November 2015 (Unaudited)|
|Net revenue for the period||$||1,425,466||$||1,029,376|
|Net revenue per gram sold||$||8.42||$||7.21|
|Gross Margin %||76.0||%||62.3||%|
|Cost of goods sold1 per gram||$||2.03||$||2.72|
|Net Income (Loss)||$||55,267||$||(201,211||)|
|EBITDA (excluding fair value adjustment to biological assets)||$||72,424||$||(62,158||)|
|Cash Flow from Operations (YTD)||$||25,958|
|1 Cost of goods sold is defined as cost of sales, indirect production costs and fair value adjustment to biological assets.|
|2 EBITDA is defined as net income (loss) excluding depreciation and financing costs.|
OrganiGram is in the midst of a fully-funded expansion of its current location which, when completed later this year, could bring annual production capacity in the order of 3,500 kilograms. Additionally, with the advent of recreational regulations forthcoming, OrganiGram’s existing acreage and infrastructure enable the Company to pursue an additional 5x increase in production capacity to accommodate the expected increase in consumer demand.
“We continue to focus on all aspects of our business with an eye towards delivering exceptional products for our customers, increasing market awareness, and driving incremental value for our shareholders. Our company is geographically positioned to benefit from some of the lowest power and labour costs in the country, which we are beginning to see reflected in our operating margins. We continue to focus on strategic initiatives to position the Company for incremental market share as we prepare for future recreational possibilities down the road,” said Denis Arsenault, CEO.
To support these initiatives, OrganiGram is pleased to announce that it has entered into an engagement agreement with XIB Consulting Inc. (“XIB”), to assist OrganiGram with its corporate development initiatives including M&A activities, strategic business development and market awareness.
Subject to the approval of the TSX Venture Exchange (the “TSXV”) and pursuant to the engagement agreement, which has an initial term of six months, the Company shall satisfy the engagement fee payable to XIB by issuing 123,456 of Common Shares in the capital of OrganiGram to XIB, which may be credited against incremental fees payable under certain circumstances. The Common Shares will be issued at a price of $0.81 per share. Any issuance of shares will be subject to applicable hold periods required under securities laws.
The appointment of XIB as a consultant of OrganiGram and the corresponding share issuance remains subject to standard regulatory acceptance of applicable filings with the TSX Venture Exchange.
OrganiGram also announces that the company’s change in jurisdiction from the Province of British Columbia to a Federally incorporated company under the Canada Business Corporations Act is now complete (the “Continuance”). The Company would like to specify that the Continuance does not represent a reorganization, amalgamation or merger and will not alter the shareholdings of the shareholders of the Company. Furthermore, the continuance will not affect the operations of the company nor will it affect the management and executives of OrganiGram.
About OrganiGram Holdings Inc.
OrganiGram Holdings Inc. is a TSX Venture Exchange listed company whose wholly owned subsidiary, OrganiGram Inc., is a licensed producer of medical marijuana in Canada. OrganiGram is focused on producing the highest quality, condition specific medical marijuana for patients in Canada. OrganiGram’s facility is located in Moncton, New Brunswick and the Company is regulated by the Marihuana for Medical Purposes Regulations.
About XIB Consulting Inc.
XIB Consulting Inc., part of the XIB Financial group of companies, is a Toronto-based capital markets consulting and advisory firm founded by Sean McNulty and Peter Hatziioannou. With over 15 years of combined mergers and acquisitions advisory, institutional equity sales, and event-driven hedge fund experience, XIB offers clients corporate consulting services from a unique perspective in the Canadian capital markets.
On behalf of the board of directors, Denis Arsenault, Director and CEO
OrganiGram Holdings Inc.
For further information, please visit www.organigram.ca.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
This news release contains forward-looking information, which involves known and unknown risks, uncertainties and other factors that may cause actual events to differ materially from current expectation. Important factors – including the availability of funds, the results of financing efforts, crop yields – that could cause actual results to differ materially from the Company’s expectations are disclosed in the Company’s documents filed from time to time on SEDAR (see www.sedar.com). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.