Organigram Holdings Inc. (“Organigram” or the
“Company”) (TSX: OGI) (NASDAQ: OGI) provides a corporate
update on recent developments of the Company in relation to the
worldwide COVID-19 pandemic and the continuing evolution of the
Canadian cannabis industry.
Staffing Changes
In an effort to better align its production capacity to
prevailing market conditions, Organigram has reduced its workforce
by approximately 25%. The decision will affect approximately 220
employees including a small number who are not on temporary layoff.
The Company will move forward with a skilled, leaner,
cross-functional workforce of approximately 433 active employees
operating out of its indoor production facility in Moncton, New
Brunswick. Company-wide, Organigram has a total workforce of 609
employees this includes 84 employees remaining on temporary layoff
who may be recalled if and when needed as the business
requires.
“These decisions are never easy to make, but we are committed to
ensuring the Company is appropriately sized relative to market
conditions – we are incredibly grateful for the commitment that our
affected employees have made in helping build the Company that
Organigram is today” said Organigram CEO Greg Engel. Throughout the
COVID-19 pandemic, Organigram has remained focused on proactive
strategies to protect the health and safety of its workers both
inside and outside of its production facility as a priority, while
also focusing on maintaining the continuity of its business. With a
reduced workforce, the Company believes it can continue to meet
current and anticipated near term demand levels.
Production Changes
For the foreseeable future the Company will continue to
cultivate less than the target production capacity of cannabis its
Moncton campus was originally designed for, with a focus on
bringing new cultivars to market and increasing the
tetrahydrocannabinol (“THC”) and terpene profile of its dried
flower to meet emerging consumer demand.
Q3 2020 and Reliance on Blanket Exemptive Relief
The Company announced that it is briefly postponing the timing
for filing of its interim financial statements, interim
management’s discussion and analysis and related certifications
(the “Q3 Interim Filings”) for the interim period ended May 31,
2020 by approximately one week.
Organigram is relying on blanket exemptive relief granted by the
Canadian securities regulatory authorities that permits it to delay
the filing of its Q3 Interim Filings otherwise required to be filed
by July 15, 2020 in accordance with the timelines prescribed by
National Instrument 51-102 – Continuous Disclosure Obligations.
The Company expects that its Q3 Interim Filings will be filed on
July 21, 2020. Until such time as the Q3 Interim Filings are filed,
Organigram management and other insiders are subject to a trading
blackout in accordance with the terms of the blanket relief.
Given the timing of the Company’s fiscal Q3 2020 corresponding
with COVID-19 coupled with changing market dynamics, the Company
expects to report a decline in net revenue for fiscal Q3 2020
compared to fiscal Q2 2020 impacted by insignificant wholesale
revenue being recorded in the quarter. The Company also expects to
report a decrease in selling, general & administrative
(SG&A) expenses for fiscal Q3 2020 compared to fiscal Q2 2020.
As the Company right-sizes its production to market demand and
reviews its asset carrying values, it expects to report negative
adjustments to inventories and an asset impairment on its Moncton
facility. Based on new production levels and its inventories on
hand, the Company currently expects it will be able to meet
consumer demand as it continues to adjust its operations to
emerging preferences in a dynamic marketplace.
Other than as disclosed in this news release and its May 29,
2020 news release, which announced the amendment to the Company’s
credit agreement dated May 31, 2019, with the Bank of Montreal as
lead arranger and agent as well as a syndicate including three
other lenders, there have been no material business developments
since the date of the Company’s last interim financial statements
filed on April 14, 2020. Notwithstanding the foregoing, the Company
has issued news releases subsequent to that date copies of which
are available on SEDAR at www.sedar.com and EDGAR at
www.sec.gov.
Q3 Conference Call Details
The Company plans to host a conference call to discuss its Q3
results with details as follows:
Date: July 21, 2020
Time: 8:00 a.m. Eastern Time
Toll Free (North America) Dial-In Number: (833)
502-0460
International Dial-In Number: +1 7785602593
* All participants will be required to enter Conference
ID: 7882447 to gain access to the call.
Webcast:
https://event.on24.com/wcc/r/2393332/93DADEF857E6C6908A4A4849C8FB44D8
A replay of the webcast will be available within 24 hours after
the conclusion of the call at https://www.organigram.ca/investors
and will be archived for a period of 90 days following the
call.
About Organigram Holdings Inc.:
Organigram Holdings Inc. is a NASDAQ and TSX listed company
whose wholly owned subsidiary, Organigram Inc., is a licensed
producer of cannabis and cannabis-derived products in Canada.
Organigram is focused on producing high-quality, indoor-grown
cannabis for patients and adult recreational consumers in Canada,
as well as developing international business partnerships to extend
the Company 's global footprint. Organigram has also developed a
portfolio of legal adult use recreational cannabis brands including
The Edison Cannabis Company, Ankr Organics and Trailblazer.
Organigram's primary facility is located in Moncton, New Brunswick
and the Company is regulated by the Cannabis Act and the Cannabis
Regulations (Canada).
Forward-looking Information
This news release contains “forward-looking information” and
“forward-looking statements” within the meaning of applicable
securities legislation (collectively, “forward-looking
information”). Often, but not always, forward-looking information
can be identified by the use of words such as “plans”, “expects”,
“estimates”, “intends”, “anticipates”, “believes” or variations of
such words and phrases or state that certain actions, events, or
results “may”, “could”, “would”, “might” or “will” be taken, occur
or be achieved, which includes, without limitation, statements
regarding the Company’s fiscal Q3 2020 results which are in
particular are based on the Company’s current expectations
concerning results for that period, but the actual results may vary
from those expectations and such variations may be material.
Forward-looking information involves known and unknown risks,
uncertainties and other factors that may cause actual results,
events, performance , prospects, opportunities or achievements of
Organigram to differ materially from current expectations or future
results, performance or achievements expressed or implied by the
forward-looking information contained in this news release. Risks,
uncertainties and other factors involved with forward-looking
information which could cause actual events, results, performance,
prospects and opportunities to differ materially from those
expressed or implied by such forward-looking information include
factors that could impact the reported financial results for fiscal
Q3 2020 and the timing thereof as well as production and product
plans, including market conditions, changing timelines, general
risks related to COVID-19, and risks as disclosed in the Company’s
most recent annual information form, management’s discussion and
analysis and other Company documents filed from time to time on
SEDAR (see www.sedar.com), or the Company’s annual report on Form
40-F and its reports on Form 6-K filed or furnished to the
Securities and Exchange Commission (the “SEC”) on EDGAR (see
www.sec.gov), and such other continuous disclosure materials as may
be filed or furnished from time to time by the Company with
Canadian securities regulatory authorities and the SEC. Although
the Company believes that the assumptions and factors used in
preparing the forward-looking information in this report are
reasonable, undue reliance should not be placed on such information
and no assurance can be given that such events will occur in the
disclosed time frames or at all. The forward-looking information
included in this news release is given as of the date of this news
release and the Company disclaims any intention or obligation,
except to the extent required by law, to update or revise any
forward-looking information, whether as a result of new
information, future events or otherwise. We seek safe harbor.
For more information about Organigram please visit
www.Organigram.ca
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200703005104/en/
Investor Relations Enquiries: Amy Schwalm Vice President,
Investor Relations (416) 704-9057 Amy.Schwalm@organigram.ca
Media Enquiries: Ray Gracewood Senior Vice President,
Marketing and Communications (506) 645-1653
ray.gracewood@organigram.ca
Organigram (NASDAQ:OGI)
Historical Stock Chart
From Mar 2024 to Apr 2024
Organigram (NASDAQ:OGI)
Historical Stock Chart
From Apr 2023 to Apr 2024