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July 25, 2024

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Organic Garage (OG.V) releases Q4 and year-end financials showing sales up 25%, stock surges 22%

Organic Garage (OG.V) announced their financial results for the fiscal year and the fiscal quarter, Q4, which ended on January 31, 2021.

Organic Garage saw their sales Q4 sales increased 32.7% to $7.3 million from $5.5 million in the same quarter the year before. They also saw their gross profit dollars increase 21.9%, to $2.2 million from $1.8 million and they turned a deficit of $1 million into $1 million of working capital. Most importantly, perhaps, OG registered a net loss of only $133,200, down from a net loss of nearly $3 million in Q4 of the year prior.

“With our fiscal year coming to an end, we are extremely proud to convey our results on what has been a transformational year for our Company. Our fourth quarter marked another period with very positive results and our 33% increase in Q4 sales highlights the strengthening relationship we have with our existing customers and growing customer base,” commented Matt Lurie, CEO of Organic Garage.

“Not only did we significantly grow our top line revenues each quarter this year, but we also managed to successfully contain and reduce our operating expenses even with additional incremental expenses related to COVID-19 that we incurred to ensure the safety of our customers and staff.”

“We concluded the fourth quarter with a remarkable improvement to our working capital and cash position in comparison to a year ago, setting us up for continued success into the next fiscal year and allowing the Company to continue to focus on delivering value for our shareholders.”

These financials put OG tantalizingly close to the black

Organic Garage’s year end financials also showed promising growth. In their fiscal year ending on January 31, 2021, they had $30.3 million in sales, compared to the FY ending on January 31, 2020, where their sales totalled $24.1 million. OG’s 25.3% sales increase led to a 33.2% increase in gross profit dollars, which went from $6.7 million to $8.9 million. While Organic Garage still ended up with a net loss on the year, it was only $263,322, which is far lower than the more than $5 million loss they ran up the year before. OG’s EBIDTA was $2.8 million compared to a loss of $1.8 million.

These financials put OG tantalizingly close to the black, and considering they recently finished their transition to a decentralised distribution model, a move they expect to save them $1 million annually, they could get there soon. Organic Garage began with a “hub-and-spoke” model, which saw most deliveries from other companies arrive at a centralized warehouse (the hub), where OG organised the goods for distribution to their field stores (the spokes).

Switching to a decentralized model will save them money and allow them greater flexibility, potentially allowing them to expand beyond the Greater Toronto Area (GTA).

“Looking forward, we have some very exciting and significant catalysts for our business. We announced our acquisition of The Future of Cheese at the end of our fiscal year and have diligently worked since then to get the Company ready for the launch of its first three products. I look forward to working with the highly capable team at Future of Cheese led by the co-founders Afrim Pristine and Craig Harding in getting their fabulous products out into the market very soon,” stated Lurie.

“Our record year-end results speak to the execution of the entire Organic Garage team. In addition to growing our sales and profit we also continued to lower our expenses and we anticipate significant savings as a result of our recently announced transition from a centralized distribution model going forward. The future looks very bright and we will continue to capitalize on growth opportunities that fit our value mandate.”

As Lurie mentioned above, Organic Garage has been expanding their product line, with an emphasis on their venture into the vegan cheese market through their acquisition of Future of Cheese in March, which recently entered into a manufacturing agreement with Flamaglo Goods. As my colleague Kieran Robertson noted, the vegan cheese market is expected to grow at a CAGR of 12.8% over the next 7 years.

Organic Garage clearly has their eyes on expansion.

Vegan cheese is not the only new product OG has brought in since January. In April, they expanded the sale Cali-Rolls and Tori’s Bakeshop’s goods to new locations, both of whom are part of their Hand-Picked Partner program.

Organic Garage clearly has their eyes on expansion. They plan on opening a new location in Leaside and a new store in a currently undecided area, but they have their eyes on expansion beyond that.

According to their own maps, they have their sights set on expansion into North York, Mississauga, Scarborough, and more.

Investors reacted positively to the financials, and since the news the stock price has gone up 9 cents, representing a 22.5% increase in OG’s share price. Nearly 1.5 million shares have been traded at the time I’m writing this at 10:40, already making it Organic Garage’s largest single day trading volume since March.

 

Full disclosure: Organic Garage is an Equity Guru marketing client.

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