Neptune Wellness Solutions Inc., 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 and twelve-month periods ending March 31, 2022.
“Neptune made significant progress on our path to become a pure play CPG company, with growth year-over-year and positive momentum in our key focus areas of Sprout and Biodroga during the fourth quarter. We expect this trend to continue into our fiscal 2023, with both Sprout and Biodroga continuing to expand their existing popular product offerings, as well as releasing new product lines that cater to different customer groups.”
“Neptune’s management and Board have made several strategic decisions recently that we believe are in the best interest of the company and its shareholders. In particular, significant cost saving initiatives, the planned divestiture of our cannabis business, and a refocusing of resources on our renewed mission of becoming a leading CPG company. In addition, we have continued our strategic review to help identify further synergies and cost savings. We are looking forward to the next phase for Neptune as we seek to capitalize on our large target addressable markets of personal care & beauty and organic food & beverages, which we believe have the most exciting growth potential. We remain steadfast in our goal to deliver on profitability and shareholder value.”
Fourth Quarter and Full Year Financial Highlights:
- Fiscal fourth quarter revenue totaled $11.5 million, an increase of 147% as compared to $4.7 million for the same period the year prior.
- Fiscal year 2022 revenue totaled $48.8 million, an increase of 37.8% as compared to $35.4 million for the same period the year prior.
- Reported fiscal year 2022 gross profit loss of $7.5 million compared to a gross profit loss of $27.4 million for the fiscal year 2021. Gross margin of (15.4%) compares to (77.3%) in the year-ago period.
- Reported fourth quarter net loss of $36.2 million compared to a reported net loss of $43.5 million in the comparable period in fiscal 2021 and reported fiscal year 2022 net loss of $84.4 million compared to a net loss of $124.3 million for the fiscal year 2021.
- Adjusted EBITDA (non-GAAP)1 loss for fiscal year 2022 was $43.8 million compared to an Adjusted EBITDA (non-GAAP)1 loss of $39.4 million for the fiscal year 2021.
- Announced further reductions of corporate overheads by expanding in-house legal capabilities.
- Announced the appointment of Julie Phillips as Chair of Neptune’s Board of Directors.
- Launched and expanded a first of its kind co-branded product line with “CoComelon” across North America.
- Received a 180 calendar day extension from Nasdaq’s Listing Qualification Department to meet Nasdaq’s minimum bid requirement.
- Launched Forest Remedies Multi-Omega 3-6-9 Supplements in 340+ Sprouts Farmers Market stores across the U.S.
- Announced a US$8,000,000 Registered Direct Offering.
- Launched new CPG-focused strategic plan to profitability.
- Announced appointment of Raymond Silcock as Chief Financial Officer.
- Announced the appointment of Philip Sanford as Audit Chair of Neptune’s Board of Directors.
- Launched new line of CoComelon co-branded organic snack bars.
- Announced completion of share consolidation from approximately 198 million Common Shares to approximately 5.7 million.
- Announced a US$5,000,000 Registered Direct Offering Priced At-the-Market Under Nasdaq Rules.
(in U.S. dollars)
|
As at |
As at |
||||
|
March 31, |
March 31, |
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|
Assets |
|||||
|
Current assets: |
|||||
|
Cash and cash equivalents |
$8,726,341 |
$59,836,889 |
|||
|
Short-term investment |
19,255 |
19,145 |
|||
|
Trade and other receivables |
7,599,584 |
8,667,209 |
|||
|
Prepaid expenses |
3,983,427 |
3,686,851 |
|||
|
Inventories |
17,059,406 |
17,317,423 |
|||
|
Total current assets |
37,388,013 |
89,527,517 |
|||
|
Property, plant and equipment |
21,448,123 |
37,345,716 |
|||
|
Operating lease right-of-use assets |
2,295,263 |
2,899,199 |
|||
|
Intangible assets |
21,655,035 |
25,956,830 |
|||
|
Goodwill |
22,168,288 |
25,453,372 |
|||
|
Marketable securities |
— |
150,000 |
|||
|
Other financial assets |
— |
5,615,167 |
|||
|
Total assets |
$104,954,722 |
$186,947,801 |
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|
Liabilities and Equity |
|||||
|
Current liabilities: |
|||||
|
Trade and other payables |
$22,700,849 |
$19,881,995 |
|||
|
Current portion of operating lease liabilities |
641,698 |
230,016 |
|||
|
Deferred revenues |
285,004 |
1,989,632 |
|||
|
Provisions |
1,118,613 |
2,245,658 |
|||
|
Liability related to warrants |
5,570,530 |
10,462,137 |
|||
|
Total current liabilities |
30,316,694 |
34,809,438 |
|||
|
Operating lease liabilities |
2,063,421 |
2,886,940 |
|||
|
Loans and borrowings |
11,648,320 |
11,312,959 |
|||
|
Other liability |
88,688 |
393,155 |
|||
|
Total liabilities |
44,117,123 |
49,402,492 |
|||
|
Shareholders’ Equity: |
|||||
|
Share capital – without par value (5,554,456 shares issued and outstanding as of March 31, 2022; |
317,051,125 |
306,618,482 |
|||
|
Warrants |
6,079,890 |
5,900,973 |
|||
|
Additional paid-in capital |
55,980,367 |
59,625,356 |
|||
|
Accumulated other comprehensive loss |
(7,814,163) |
(8,567,106) |
|||
|
Deficit |
(323,181,697) |
(248,209,952) |
|||
|
Total equity attributable to equity holders of the Corporation |
48,115,522 |
115,367,753 |
|||
|
Non-controlling interest |
12,722,077 |
22,177,556 |
|||
|
Total shareholders’ equity |
60,837,599 |
137,545,309 |
|||
|
Commitments and contingencies |
|||||
|
Subsequent events |
|||||
|
Total liabilities and shareholders’ equity |
$104,954,722 |
$186,947,801 |
|
See accompanying notes to the consolidated financial statements. |
Neptune Wellness Solutions Inc.
Consolidated Statements of Loss and Comprehensive Loss
(in U.S. dollars)
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Years ended |
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March 31, |
March 31, |
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|
Revenue from sales and services, net of excise taxes of $1,877,543 (2021 – $38,056) |
$47,695,828 |
$34,261,647 |
||||
|
Royalty revenues |
1,019,861 |
1,109,678 |
||||
|
Other revenues |
81,435 |
28,994 |
||||
|
Total revenues |
48,797,124 |
35,400,319 |
||||
|
Cost of sales other than loss on inventories, net of subsidies |
(52,561,404) |
(30,964,709) |
||||
|
Cost of services |
— |
(12,846,937) |
||||
|
Impairment loss on inventories |
(3,772,066) |
(18,962,254) |
||||
|
Total Cost of sales and services |
(56,333,470) |
(62,773,900) |
||||
|
Gross profit (loss) |
(7,536,346) |
(27,373,581) |
||||
|
Research and development expenses, net of tax credits and grants |
(880,151) |
(1,922,195) |
||||
|
Selling, general and administrative expenses, net of subsidies |
(60,538,424) |
(63,824,118) |
||||
|
Impairment loss related to intangible assets |
(1,527,000) |
— |
||||
|
Impairment loss related to property, plant and equipment |
(14,765,582) |
(10,747,692) |
||||
|
Impairment loss related to right-of-use assets |
— |
(107,650) |
||||
|
Impairment loss related to goodwill |
(3,288,847) |
(26,898,016) |
||||
|
Net gain on sale of assets |
6,469 |
— |
||||
|
Loss from operating activities |
(88,529,881) |
(130,873,252) |
||||
|
Finance income |
7,123 |
825,745 |
||||
|
Finance costs |
(2,143,978) |
(1,786,781) |
||||
|
Foreign exchange loss |
(685,708) |
(4,051,418) |
||||
|
Change in revaluation of marketable securities |
(107,203) |
169,216 |
||||
|
Gain on revaluation of derivatives |
7,035,118 |
7,974,549 |
||||
|
4,105,352 |
3,131,311 |
|||||
|
Loss before income taxes |
(84,424,529) |
(127,741,941) |
||||
|
Income tax recovery |
— |
3,477,711 |
||||
|
Net loss |
(84,424,529) |
(124,264,230) |
||||
|
Other comprehensive income |
||||||
|
Net change in unrealized foreign currency gains on translation of |
750,248 |
6,737,947 |
||||
|
Total other comprehensive income |
750,248 |
6,737,947 |
||||
|
Total comprehensive loss |
$(83,674,281) |
$(117,526,283) |
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|
Net loss attributable to: |
||||||
|
Equity holders of the Corporation |
$(74,971,745) |
$(123,170,020) |
||||
|
Non-controlling interest |
(9,452,784) |
(1,094,210) |
||||
|
Net loss |
$(84,424,529) |
$(124,264,230) |
||||
|
Total comprehensive loss attributable to: |
||||||
|
Equity holders of the Corporation |
$(74,218,802) |
$(116,206,145) |
||||
|
Non-controlling interest |
(9,455,479) |
(1,320,138) |
||||
|
Total comprehensive loss |
$(83,674,281) |
$(117,526,283) |
||||
|
Basic and diluted loss per share attributable to: |
||||||
|
Equity holders of the Corporation |
$(15.54) |
$(35.55) |
||||
|
Non-controlling interest |
$(1.96) |
$(0.32) |
||||
|
Total loss per share |
$(17.50) |
$(35.86) |
||||
|
Basic and diluted weighted average number of common shares |
4,824,336 |
3,465,059 |
||||
See accompanying notes to the consolidated financial statements.
Selected Consolidated Financial Information
The following table sets out selected consolidated financial information and are prepared in accordance with US GAAP.
|
Twelve-month periods ended |
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March 31, |
March 31, |
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|
$ |
$ |
|||||||
|
Total revenues |
48.797 |
35.400 |
||||||
|
Adjusted EBITDA1 |
(43.811) |
(39.444) |
||||||
|
Net loss |
(84.425) |
(124.264) |
||||||
|
Net loss attributable to equity holders of the |
(74.972) |
(123.170) |
||||||
|
Net loss attributable to non-controlling interest |
(9.453) |
(1.094) |
||||||
|
Basic and diluted loss per share |
(17.50) |
(35.86) |
||||||
|
Basic and diluted loss per share attributable |
(15.54) |
(35.55) |
||||||
|
Basic and diluted loss per share attributable |
(1.96) |
(0.32) |
||||||
|
As at |
As at |
As at |
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|
$ |
$ |
$ |
||||
|
Total assets |
104.955 |
186.948 |
120.060 |
|||
|
Working capital2 |
7.071 |
54.718 |
15.346 |
|||
|
Non-current financial liabilities |
13.800 |
14.593 |
4.854 |
|||
|
Equity attributable to equity holders of the Corporation |
48.116 |
115.368 |
102.962 |
|||
|
Equity attributable to non-controlling interest |
12.722 |
22.178 |
— |
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|
1 The Adjusted EBITDA is a non-GAAP measure. It is not a standard measure endorsed by US GAAP requirements. A reconciliation |
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|
2 Working capital is calculated by subtracting current liabilities from current assets. Because there is no standard method endorsed by |
||||||
Adjusted EBITDA1 reconciliation, in millions of dollars
|
Twelve-month periods ended |
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|
March 31, |
March 31, |
|||||||
|
Net income (loss) for the period |
$(84.425) |
$(124.264) |
||||||
|
Add (deduct): |
||||||||
|
Depreciation and amortization |
6.791 |
8.830 |
||||||
|
Acceleration of amortization of long-lived non-financial assets |
— |
10.552 |
||||||
|
Revaluation of derivatives |
(7.035) |
(7.975) |
||||||
|
Net finance costs |
2.823 |
5.012 |
||||||
|
Equity classified stock-based compensation |
7.817 |
9.885 |
||||||
|
Non-employee compensation related to warrants |
0.179 |
1.904 |
||||||
|
Litigation provisions |
0.627 |
1.290 |
||||||
|
Business acquisition and integration costs |
1.027 |
0.300 |
||||||
|
System migration, conversion, implementation |
0.327 |
— |
||||||
|
CEO D&O insurance |
4.697 |
— |
||||||
|
Signing bonuses, severances and related costs |
0.851 |
0.454 |
||||||
|
Costs related to cybersecurity incident |
— |
1.500 |
||||||
|
Write-down of inventories and deposits |
3.772 |
18.962 |
||||||
|
Impairment loss on long-lived assets |
18.054 |
37.753 |
||||||
|
Costs related to conversion from IFRS to US GAAP |
0.577 |
— |
||||||
|
Change in revaluation of marketable securities |
0.107 |
(0.169) |
||||||
|
Income tax expense (recovery) |
— |
(3.478) |
||||||
|
Adjusted EBITDA1 |
$(43.811) |
$(39.444) |
||||||
|
1 The Adjusted EBITDA is not a standard measure endorsed by US GAAP requirements. |
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/.
