STOCKS TELEGRAPH

Tag: agriculture

  • Tilray Inc. (TLRY) Stock Surges Following Announcement of Promising Financial Reports for Fiscal Q4 2021

    Tilray Inc. (TLRY) stock prices were up 22.47% as of the market opening on July 28th, 2021, bringing the price per share up to USD$15.69 early on in the trading day.

    Net Revenue Breakdown

    Net revenue for the fourth quarter of fiscal 2021 was reported at USD$142.2 million, up 25% from the USD$113.5 million reported for the prior year quarter. The increase was largely driven by a 36% increase in net cannabis revenue, which was reported at USD$53.7 million. This included a four wee contribution from legacy-Tilray, a 10% decline in distribution revenue, and a net beverage alcohol revenue of USD$15.9 million as a result of TLRY stock’s acquisition of SweetWater on November 25th 2020. Also contributing to the year-over-year increase was wellness revenue in the amount of USD$5.8 million from Manitoba Harvest.

    Income and Adjusted EBITDA

    Net income for the 2021 quarter came in at USD$33.6 million, a massive improvement from the net loss of USD$84.3 million reported in the prior year quarter. Adjusted EBITDA was up to USD$12.3 million during the fourth quarter of 2021, representing a massive 285% increase from the USD$3.2 million reported in the prior-year quarter. This marks the ninth consecutive quarter of positive Adjusted EBITDA.

    TLRY Stock’s Gross Profits

    Gross Profits were down to USD$22.5 million for the quarter, a 19% decrease from the USD$27.8 million reported in the prior-year quarter. Gross profits for the quarter included a one-time inventory valuation adjustment of USD$19.9 million, derived from excess inventory quantities as of the business combination with Aphria. Adjusted gross profit was reported at USD$42.4 million, a 53% increase from the USD$27.8 million reported for Q4 2020.

    Ongoing Cost Synergies

    TLRY stock anticipates facilitating significant cost synergies amounting to a total of USD$80 million within eighteen months of closing its business combination with Aphria Tilray. These cost synergies are forecasted to be focused in the key areas of cultivation and production, cannabis and product purchasing, sales, and marketing, as well as corporate expenses. So far, the company has achieved USD$35 million in synergies.

    Future Outlook for TLRY

    Armed with the success of its most recent financial reports for the last quarter of fiscal 2021, TLRY is poised to continue its trajectory of success into the new year. Current and potential investors are hopeful that management will be able to leverage the resources at its disposal to facilitate significant and sustained increases in shareholder value.

  • Organigram Holdings Inc. (OGI) Stock on the Rise Following Improved Financials for Q3 2021

    Organigram Holdings Inc. (OGI) stock prices were up 12.83% shortly after the trading day commenced on July 13th, 2021, bringing the price per share up to USD$2.99 early on in the trading day.

    Net Revenue Reports

    Net revenues for the third quarter of fiscal 2021 were up 13% from the prior-year quarter, resulting primarily from higher adult-use recreational net revenue and higher wholesale revenue reported for the 2021 quarter. The third quarter of fiscal 2020 reported a reduction in adult-use recreational net revenue, stemming from a provision for product returns and pricing adjustments in the amount of USD$3 million. This, in turn, was largely motivated by slow-moving oil and certain flower products.

    Gross Revenue

    The same factors contributed to gross revenues for the third quarter of fiscal 2021 also increasing, up 31% as compared to the third quarter of 2020. Cost of sales for the quarter were down from the previous year, with the year-over-year difference being largely attributable to USD$30 million in inventory write-offs and provisions. Further compounding the difference were changes in the workforce in the 2020 quarter, instigated by the onset of the global pandemic.

    Improvements in Gross Margin

    Gross margin for Q3 2021 was up a significant 104% from the negative Q3 2020 gross margin, largely driven by fair value changes to biological assets and the sale of inventory. Net non-cash positive fair value changes to biological assets and inventories sold in the third quarter of 2021, as compared to the negative changes reported for the prior year quarter.

    Solid Liquidity Position

    The company reported a significant year-over-year improvement of 163% in their liquidity position. April 1st 2021 saw the company having repaid the entirety of its outstanding balances, in the amount of almost USD$58.5 million, as per its credit agreement with BMO and a cohort of lenders. This move is expected to save the company USD$2.7 million in annual interest savings. The company currently has a solid liquidity position of USD$222 million in cash and short-term investments.

    Future Outlook for OGI

    Armed with a solid liquidity position and the disclosure of healthy financials, OGI is poised to capitalize on the momentum generated by its success in Q3 2021. Current and potential investors are keen to see the company leverage the resources at its disposal to continue its trajectory of success, in order to usher in long term increases in shareholder value.

  • Origin Agritech Ltd. (SEED) Stock Surges Following Expansion of GMO Trait Portfolio

    Origin Agritech Ltd. (SEED) Stock Surges Following Expansion of GMO Trait Portfolio

    Origin Agritech Ltd. (SEED) stock prices were up by 29.22% some time after market trading commenced on July 12th, 2021, bringing the price per share up to USD$11.63 early on in the trading day.

    Exclusive Rights Agreement

    July 12th, 2021 saw the company announce that it had entered into an exclusive rights agreement with the Biology Research Institute of the Chinese Academy of Agricultural Sciences, in regard to its proprietary drought resistant GMO trait. The agreement will see the company gain exclusive global rights to the GMO trait for the entire duration of the patent. The Chinese Ministry of Agriculture and Rural Affairs approved the drought tolerance corn for production trials, representing the fourth stage in a five stage process to receive a bio-safety certificate.

    Drought Resistant Traits

    With the company already having successfully converted its elite corn hybrids into drought resistant  traits, which express excellent performance under water stress conditions throughout the growing period. Multi year experiments have indicated drought tolerance corn yield that is 9.2 to 16.2% higher than non-GMO corn under water stress conditions. In the case of irrigation, the GMO enhanced corn increases water use efficiency by 33-47%.

    Approval for Hybrid Corn Breeds

    July 8th, 2021 had seen the company announce its approval from the Ministry of Agriculture and Rural Affairs for four of its new hybrid corn breeds. This move has seen the company expand its product pipeline and increase its competitiveness in the Chinese corn seed market. The company also has GMO enhanced versions of the newly approved hybrids that are currently in the approval pipeline.

    Scope of Approval

    The Ministry of Agriculture and Rural Affairs recently increased the national standards required for the approval of corn and rice varieties, thus further promoting further innovation in germplasm development. Being on of the few participating companies in the Green Pass program, the company is in a unique position to streamline the approval process, resulting in the submission of more hybrids for approval per year. This will, in turn, strengthen the company’s ability to add multiple new hybrids to market annually, which will include many GMO enhanced hybrids.

    Future Outlook for SEED

    Armed with the recent development of its product pipeline, SEED is poised to push for the accelerated commercialization and effective proliferation of its corn hybrids in the Chinese market space. Current and potential investors are hopeful that management will continue to leverage the resources at their disposal to facilitate significant and sustained increases in shareholder value.

  • Hydrofarm Holdings Group, Inc. (HYFM) Stock Undergoes Volatility ‎Following Acquisition of Aurora

    Hydrofarm Holdings Group, Inc. (HYFM) Stock Undergoes Volatility ‎Following Acquisition of Aurora

    Hydrofarm Holdings Group, Inc. (HYFM) stock prices were down by a concerning 4.54% as of the market closing on June 17th, 2021, bringing the price per share down to USD$54.43 at the end of the trading day. After-hours trading saw the stock rally by 4.34%, bringing it back up to USD$56.79.

    Acquisition of Aurora

    The company announced on June 17th, 2021 that it had entered into an agreement that would oversee that acquisition of Aurora. The deal will result in the acquisition of Aurora Innovations, Aurora International, and Gotham Properties, the latter of which is a manufacturer and supplier of organic hydroponic products, based out of Eugene, Oregon.

    Expansion of Offerings

    The acquired company’s Roots Organics and Soul soil and grow media and nutrients brands will be added to HYFM’s product portfolio. The catalogue of offerings will also be expanded to include Aurora’s Procision perlite and peat moss professional mixes as high-performance, proprietary branded products.

    Funding the Acquisition

    The closing transaction will be funded for a total consideration of USD$161 million, which will be a combination of both cash and company stock. The newly issued HYFM common stock will amount to approximately USD$26 million. The transaction considered does not include a potential earn out a payment that could amount to USD$21 million, depending on the achievement of certain performance metrics. As per the agreement, Aurora will become a wholly-owned indirect subsidiary of HYFM. The closing of the transaction is expected for the end of July 2021, following the satisfaction of customary closing conditions

    Scope of Merger

    The strategic collaboration serves to make HYFM’s stated goals of acquiring high-growth businesses more accessible. Targeted companies for acquisition are selected based on attractive margin profiles and in-house manufacturing and/or ownership of the branded products being sold. HYFM forecasts Aurora to generate almost UD$60 million in net sales for the full calendar year 2021. In conjunction with the estimated earnout payment, the full transaction consideration represents an acquisition value that come out to almost nine times the numbers reported for Aurora’s Adjusted EBITDA for 2021. This excludes synergies but is inclusive of the net present value of estimated tax benefits resulting from the transaction.

    Future Outlook for HYFM

    Armed with the latest in a string of potentially profitable acquisitions, HYFM is poised to continue its trajectory of success. Current and potential investors are hopeful that management will leverage the resources at their disposal to facilitate significant and sustained increases in shareholder value.