Organigram Holdings: Strategic Investments, Legal Challenges, and International Growth
2023-12-30
Organigram Holdings recently held a conference call to discuss their fourth quarter and fiscal 2023 earnings. The call, operated by Krista, covered various topics related to the company's performance and future plans. Listeners were cautioned about the inclusion of estimates and forward-looking information and were directed to review the cautionary language in the press release for more details.
During the call, non-IFRS measures such as adjusted EBITDA, free cash flow, and adjusted gross margin were discussed. The recording of the conference call would be made available on Organigram's website 24 hours after the call.
Organigram relies on reputable third-party providers such as Hifyre and Weedcrawler, as well as provincial boards, retailers, and internal sales figures for market share data. The Chief Executive Officer of Organigram Holdings is Beena Goldenberg, and other executives present during the call included Tim Emberg.
The call covered various topics related to Organigram's operations and future plans. The company highlighted their successful brand, SHRED, and their leading position in the milled flower market. They also mentioned their No. 1 position in the gummies category during Q4.
Organigram discussed their challenge to Health Canada's determination on JOLTS ingestible extracts. The Federal Court granted their application for judicial review and determined a breach of procedural fairness by Health Canada.
The company also discussed their progress in different areas, such as their Moncton facility, where they continue to make progress on fundamental science and formulations. Ongoing studies in a clinical setting with pharmacokinetic studies underway for their nanotechnology formulation were mentioned.
Organigram's investment from BAT was highlighted as a critical differentiator, with BAT's support evolving into a more collaborative and complementary relationship. The investment of $124.6 million from BAT is allocated to Jupiter, a strategic investment pool managed by Organigram, to increase their global footprint and for general corporate purposes.
The call also touched on the challenges faced by the cannabis industry, including closures and bankruptcies. Organigram emphasized their focus on defending market share and their plans for international growth, including obtaining EU GMP certification and expanding international shipments.
The company's financial performance was discussed, with increases in gross and net revenue in fiscal 2023 compared to the previous year. The increase in revenue was primarily driven by net increases in recreational and international revenue. However, there were challenges in the domestic medical sales segment.
Expenses and investments were also covered, with discussions on the company's initiatives to drive efficiencies and cost-cutting projects. The company realized savings from these initiatives in fiscal 2023 and expects additional savings in fiscal 2024. They also highlighted investments in PP&E and strategic investments in Greentank and Phylos.
The call concluded with closing remarks from Beena Goldenberg, who wished everyone a happy and healthy holiday season. The company plans to report their Q1 in mid-February.