Fiscal Q1 2023 revenue totaled $16.3 million, an increase of 61%
year-over-year
Sprout recorded $8.2
million in revenue, its largest net sales quarter on
record
Personal Care and Beauty recorded
$5.1 million in revenue, the highest
in over two years
Company will host a conference call at
5:00 p.m. (Eastern Time) Monday,
August 15, 2022, to discuss these results
LAVAL,
QC, Aug. 15, 2022 /CNW/ - Neptune Wellness
Solutions Inc. ("Neptune" or the "Company") (NASDAQ: NEPT) (TSX:
NEPT), a diversified and fully integrated health and wellness
company focused on plant-based, sustainable and purpose-driven
lifestyle brands, today announced its financial and operating
results for the three-month period ending June 30, 2022.
Statement from Neptune Management and Board of
Directors:
"The results Neptune achieved in the first quarter of fiscal
2023 reflect the impacts of strategic decisions we have made over
the past year to become a leading consumer packaged goods company.
We reported revenue of $16.3 million,
an increase of 61% year-over-year, led by Sprout, which had its
largest net sales quarter yet, and our personal care and beauty
products, which generated the largest quarter of revenue in two
years."
"We are also continually striving to reduce expenses. Since our
strategic review in late 2021, and including our most recent
payroll reductions at cannabis and corporate, we have now reduced
expenditures by approximately $18
million. This figure includes $7.6
million of reduced payroll expense across corporate and
business units, with total headcount decreasing from 170 to 56, a
67% reduction. While it has been a year of tough strategic
decisions, we are laser-focused on a path to growth and
profitability and believe we are well-positioned to create value
going forward."
First Quarter 2023 Financial Highlights:
- Fiscal first quarter 2023 revenue totaled $16.3 million, as compared to $10.1 million or an increase of 61% for the same
period in fiscal 2022.
- Reported fiscal first quarter 2023 gross profit loss of
$2.9 million compared to a gross
profit loss of $2.3 million for the
fiscal first quarter 2022.
- Adjusted EBITDA (non-GAAP)1 loss for fiscal
first quarter 2023 was $9.8 million
compared to an Adjusted EBITDA (non-GAAP)1 loss of
$12.9 million for fiscal first
quarter 2022.
- Reported first quarter net loss of $6.5
million compared to a reported net loss of $18.9 million in the prior comparable period in
fiscal 2022.
First Quarter Business Highlights:
- Launched a new CPG-focused strategic plan to
profitability, including divestiture of cannabis business.
- Announced appointment of Raymond
Silcock as Chief Financial Officer.
- Announced the addition of Philip
Sanford as Audit Chair of Neptune's Board of Directors.
- Launched a new line of CoComelon co-branded organic snack
bars.
- Announced the completion of a share consolidation.
- Closed a US$5,000,000 Registered
Direct Offering Priced At-the-Market Under Nasdaq Rules.
Subsequent Events and Business Updates:
- Announced Amendment and Expansion of Sprout Secured Promissory
Notes led by Morgan Stanley to expand the facility from
US$22.5 million to a maximum of
US$37.5 million.
- Provided a Sprout Organics Distribution Update and discussed
potential expansion into new product categories beyond Baby Food
Aisle.
Conference Call Details:
The Company will host a
conference call at 5:00 p.m. (Eastern Time)
on Monday, August 15, 2022, to discuss these results. The
conference call will be webcast live and can be accessed by
registering on the Events and Presentations portion of Neptune's
Investor Relations website at www.investors.neptunewellness.com.
The webcast will be archived for approximately 90 days.
____________________________
|
1 This is a
non-GAAP measure. For further information on non-GAAP measures,
please refer to the "Non-GAAP Measures" section of this news
release. Please also refer to the tables in this news release for a
reconciliation of this Non-GAAP measure to the most directly
comparable GAAP measure.
|
NEPTUNE WELLNESS SOLUTIONS INC.
Condensed
Consolidated Interim Balance Sheets
(Unaudited) (in U.S. dollars)
|
|
|
As at
|
|
As at
|
|
|
|
June 30,
2022
|
|
March 31,
2022
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$6,231,968
|
|
$8,726,341
|
Short-term
investment
|
|
|
18,715
|
|
19,255
|
Trade and other
receivables
|
|
|
6,182,876
|
|
7,599,584
|
Prepaid
expenses
|
|
|
2,865,974
|
|
3,983,427
|
Inventories
|
|
|
14,056,514
|
|
17,059,406
|
Assets held for
sale
|
|
|
21,834,039
|
|
—
|
Total current
assets
|
|
|
51,190,086
|
|
37,388,013
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
|
1,412,323
|
|
21,448,123
|
Operating lease
right-of-use assets
|
|
|
2,046,835
|
|
2,295,263
|
Intangible
assets
|
|
|
21,013,953
|
|
21,655,035
|
Goodwill
|
|
|
22,093,222
|
|
22,168,288
|
Total assets
|
|
|
$97,756,419
|
|
$104,954,722
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Trade and other
payables
|
|
|
$21,296,277
|
|
$22,700,849
|
Current portion of
operating lease liabilities
|
|
|
626,928
|
|
641,698
|
Deferred
revenues
|
|
|
351,551
|
|
285,004
|
Provisions
|
|
|
1,229,462
|
|
1,118,613
|
Liability related to
warrants
|
|
|
3,167,947
|
|
5,570,530
|
Liabilities directly
associated with assets held for sale
|
|
|
3,537,176
|
|
—
|
Total current
liabilities
|
|
|
30,209,341
|
|
30,316,694
|
|
|
|
|
|
|
Operating lease
liabilities
|
|
|
1,873,919
|
|
2,063,421
|
Loans and
borrowings
|
|
|
11,881,589
|
|
11,648,320
|
Other
liability
|
|
|
12,931
|
|
88,688
|
Total
liabilities
|
|
|
43,977,780
|
|
44,117,123
|
|
|
|
|
|
|
Shareholders'
Equity:
|
|
|
|
|
|
Share capital -
without par value (7,614,434 shares issued and
outstanding as of
June 30, 2022; 5,560,829 shares
issued and outstanding as of March 31, 2022)
|
|
|
318,921,917
|
|
317,051,125
|
Warrants
|
|
|
6,079,890
|
|
6,079,890
|
Additional paid-in
capital
|
|
|
56,346,589
|
|
55,980,367
|
Accumulated other
comprehensive loss
|
|
|
(10,605,642)
|
|
(7,814,163)
|
Deficit
|
|
|
(327,466,047)
|
|
(323,181,697)
|
Total equity
attributable to equity holders of the Corporation
|
|
|
43,276,707
|
|
48,115,522
|
|
|
|
|
|
|
Non-controlling
interest
|
|
|
10,501,932
|
|
12,722,077
|
Total shareholders'
equity
|
|
|
53,778,639
|
|
60,837,599
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
Subsequent
events
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
|
|
$97,756,419
|
|
$104,954,722
|
NEPTUNE WELLNESS SOLUTIONS INC.
Condensed Consolidated
Interim Statements of Loss and Comprehensive Loss
(Unaudited) (in U.S. dollars)
For the three-month periods ended June 30,
2022 and 2021
|
|
|
|
|
|
|
|
|
June 30,
2022
|
|
June 30,
2021
|
|
|
|
|
|
|
|
Revenue from sales, net
of excise taxes
|
|
|
$15,968,098
|
|
$9,821,640
|
Royalty
revenues
|
|
|
284,189
|
|
236,067
|
Other
revenues
|
|
|
19,941
|
|
20,802
|
Total
revenues
|
|
|
16,272,228
|
|
10,078,509
|
|
|
|
|
|
|
|
Cost of sales other
than loss on inventories, net of subsidies
|
|
|
(16,086,578)
|
|
(12,401,043)
|
Impairment loss on
inventories
|
|
|
(3,079,997)
|
|
—
|
Total Cost of
sales
|
|
|
(19,166,575)
|
|
(12,401,043)
|
Gross profit
(loss)
|
|
|
(2,894,347)
|
|
(2,322,534)
|
|
|
|
|
|
|
|
Research and
development expenses
|
|
|
(214,687)
|
|
(259,666)
|
Selling, general and
administrative expenses, net of subsidies
|
|
|
(10,553,734)
|
|
(16,014,634)
|
Impairment loss related
to property, plant and equipment
|
|
|
(815,661)
|
|
(529,732)
|
Net gain on sale of
assets
|
|
|
85,002
|
|
—
|
Loss from operating
activities
|
|
|
(14,393,427)
|
|
(19,126,566)
|
|
|
|
|
|
|
|
Finance
income
|
|
|
1,424
|
|
7,339
|
Finance
costs
|
|
|
(916,522)
|
|
(358,116)
|
Loss on issuance of
derivatives
|
|
|
(2,126,955)
|
|
—
|
Foreign exchange gains
(losses)
|
|
|
1,407,285
|
|
(1,287,387)
|
Change in revaluation
of marketable securities
|
|
|
—
|
|
(12,212)
|
Gain on revaluation of
derivatives
|
|
|
9,523,700
|
|
1,933,330
|
|
|
|
|
7,888,932
|
|
282,954
|
Loss before income
taxes
|
|
|
(6,504,495)
|
|
(18,843,612)
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
—
|
|
(12,098)
|
Net loss
|
|
|
(6,504,495)
|
|
(18,855,710)
|
|
|
|
|
|
|
|
Other comprehensive
(loss) income
|
|
|
|
|
|
Net change in
unrealized foreign currency (losses) gains on translation of
net investments in foreign
operations
|
|
|
(2,791,479)
|
|
1,976,562
|
Total other
comprehensive (loss) income
|
|
|
(2,791,479)
|
|
1,976,562
|
|
|
|
|
|
|
|
Total comprehensive
loss
|
|
|
$(9,295,974)
|
|
$(16,879,148)
|
|
|
|
|
|
|
|
Net loss attributable
to:
|
|
|
|
|
|
Equity holders of the
Corporation
|
|
|
$(4,284,350)
|
|
$(16,907,628)
|
Non-controlling
interest
|
|
|
(2,220,145)
|
|
(1,948,082)
|
Net loss
|
|
|
$(6,504,495)
|
|
$(18,855,710)
|
|
|
|
|
|
|
|
Total comprehensive
loss attributable to:
|
|
|
|
|
|
Equity holders of the
Corporation
|
|
|
$(7,075,829)
|
|
$(14,931,066)
|
Non-controlling
interest
|
|
|
(2,220,145)
|
|
(1,948,082)
|
Total comprehensive
loss
|
|
|
$(9,295,974)
|
|
$(16,879,148)
|
|
|
|
|
|
|
|
Basic and diluted loss
per share attributable to:
|
|
|
|
|
|
Equity holders of the
Corporation
|
|
|
$(0.72)
|
|
$(3.56)
|
Non-controlling
interest
|
|
|
$(0.37)
|
|
$(0.41)
|
Total loss per
share
|
|
|
$(1.09)
|
|
$(3.97)
|
|
|
|
|
|
|
|
Basic and diluted
weighted average number of common shares
|
|
|
5,958,266
|
|
4,744,685
|
Adjusted EBITDA1 reconciliation, in millions of
dollars
|
|
Three-month periods
ended
|
|
|
June 30,
2022
|
|
June 30,
2021
|
|
|
|
|
|
Net loss for the
period
|
|
$(6.504)
|
|
$(18.856)
|
Add
(deduct):
|
|
|
|
|
Depreciation and
amortization
|
|
1.039
|
|
1.344
|
Revaluation of
derivatives
|
|
(9.524)
|
|
(1.933)
|
Net finance
costs
|
|
1.635
|
|
1.638
|
Equity classified
stock-based compensation
|
|
2.706
|
|
3.080
|
Non-employee
compensation related to warrants
|
|
—
|
|
0.093
|
Litigation
provisions
|
|
(0.263)
|
|
0.116
|
Business acquisition
and integration costs
|
|
—
|
|
1.048
|
CEO D&O
insurance
|
|
(3.154)
|
|
—
|
Signing bonuses,
severances and related costs
|
|
0.390
|
|
—
|
Write-down of
inventories and deposits
|
|
3.080
|
|
—
|
Impairment loss on
long-lived assets
|
|
0.816
|
|
0.530
|
Change in revaluation
of marketable securities
|
|
—
|
|
0.012
|
Income tax expense
(recovery)
|
|
—
|
|
0.012
|
Adjusted
EBITDA1
|
|
$(9.779)
|
|
$(12.916)
|
1 The
Adjusted EBITDA is not a standard measure endorsed by US GAAP
requirements.
|
ADJUSTED EBITDA
Although the concept of Adjusted EBITDA is not a financial or
accounting measure defined under US GAAP and it may not be
comparable to other issuers, it is widely used by companies.
Neptune obtains its Adjusted EBITDA measurement by adding to net
loss, net finance costs (income) and depreciation and amortization,
and income tax expense (recovery). Other items such as equity
classified stock-based compensation, non-employee compensation
related to warrants, litigation provisions, business acquisition
and integration costs, signing bonuses, severances and related
costs, impairment losses on non-financial assets, write-downs of
non-financial assets, revaluations of derivatives, system
migration, conversion and implementation, CEO directors and
officers insurance, costs related to conversion from IFRS to US
GAAP and other changes in fair values are also added back. The
exclusion of net finance costs (income) eliminates the impact on
earnings derived from non-operational activities. The exclusion of
depreciation and amortization, stock-based compensation,
non-employee compensation related to warrants, litigation
provisions, impairment losses, write-downs revaluations of
derivatives and other changes in fair values eliminates the
non-cash impact, and the exclusion of acquisition costs,
integration costs, signing bonuses, severance and related costs,
costs related to cybersecurity and costs related to conversion from
IFRS to US GAAP present the results of the on-going business. From
time to time, the Company may exclude additional items if it
believes doing so would result in a more effective analysis of
underlying operating performance. In Q4 2022, the Company added the
costs related to the conversion from IFRS to US GAAP as an
adjustment to the definition of Adjusted EBITDA. Adjusting for
these items does not imply they are non-recurring. For purposes of
this analysis, the Net finance costs (income) caption in the
reconciliation below includes the impact of the revaluation of
foreign exchange rates.
About Neptune Wellness Solutions Inc.
Headquartered in Laval, Quebec,
Neptune is a diversified health and wellness company with a mission
to redefine health and wellness. Neptune is focused on building a
portfolio of high quality, affordable consumer products in response
to long-term secular trends and market demand for natural,
plant-based, sustainable and purpose-driven lifestyle brands. The
Company utilizes a highly flexible, cost-efficient manufacturing
and supply chain infrastructure that can be scaled to quickly adapt
to consumer demand and bring new products to market through its
mass retail partners and e-commerce channels. For additional
information, please visit: https://neptunewellness.com/.
Disclaimer – Safe Harbor Forward–Looking Statements
This news release contains "forward-looking information" and
"forward-looking statements" (collectively, "forward-looking
statements") within the meaning of applicable securities laws. All
statements, other than statements of historical fact, are
forward-looking statements and are based on expectations,
estimates, and projections as at the date of this news release. Any
statement that involves discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives, assumptions,
future events or performance (often but not always using phrases
such as "expects", or "does not expect", "is expected",
"anticipates" or "does not anticipate", "plans", "budget",
"scheduled", "forecasts", "estimates", "believes" or "intends" or
variations of such words and phrases or stating that certain
actions, events or results "may" or "could", "would", "might" or
"will" be taken to occur or be achieved) are not statements of
historical fact and may be forward-looking statements. In this news
release, forward-looking statements include, among other things,
statements with respect to the Company's strategic review, expected
cost savings, projected growth of Sprout and Biodroga, the success
of the Company's action plan, including the divestiture of the
Company's cannabis business, future increased revenues,
expectations regarding expenses, cash needs, cash flow, liquidity
and sources of funding, future expansion plans, initiatives
and strategies of the Company, and the Company's performance,
growth initiatives, profitability, future product launches and
plans and gain in market share, as well as the timing for the
filing of the Restated Filings.
These forward-looking statements are based on assumptions and
estimates of management of the Company at the time such statements
were made. Actual future results may differ materially as
forward-looking statements involve known and unknown risks,
uncertainties, and other factors which may cause the actual
results, performance, or achievements of the Company to materially
differ from any future results, performance, or achievements
expressed or implied by such forward-looking statements. Such
factors, among other things, include: the ability of the Company to
successfully implement its strategic initiatives; implications of
the COVID-19 pandemic on the Company's operations; fluctuations in
general macroeconomic conditions; fluctuations in securities
markets; changing consumer habits; the ability of the Company to
successfully achieve its business objectives and cost cutting
plans; plans for expansion; political and social uncertainties;
inability to obtain adequate insurance to cover risks and hazards;
the ability of the Company to obtain financing on acceptable terms,
the adequacy of our capital resources and liquidity, including but
not limited to, availability of sufficient cash flow to execute our
business plan (either within the expected timeframe or at all); the
ability of the Company to obtain financing on acceptable terms,
expectations regarding the resolution of litigation and other legal
and regulatory proceedings, reviews and investigations; employee
relations; and the presence of laws and regulations that may impose
restrictions in the markets where the Company operates. Although
the forward-looking statements contained in this news release are
based upon what management of the Company believes, or believed at
the time, to be reasonable assumptions, the Company cannot assure
shareholders that actual results will be consistent with such
forward-looking statements, as there may be other factors that
cause results not to be as anticipated, estimated or intended.
Readers should not place undue reliance on the forward-looking
statements and information contained in this news release. The
Company assumes no obligation to update the forward-looking
statements of beliefs, opinions, projections, or other factors,
should they change, except as required by law.
Additional information regarding these and other risks and
uncertainties relating to the Company's business are contained
under the heading "Risk Factors" in the Company's Annual Report on
Form 10-K dated July 7, 2022, for the
year ended March 31, 2022.
Neither NASDAQ nor the Toronto Stock Exchange accepts
responsibility for the adequacy or accuracy of this
release.
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SOURCE Neptune Wellness Solutions Inc.