Consolidated revenues for fiscal 2023
totaled $52.6 million, an increase of
$3.8 million or 7.8% as compared to
$48.8 million for fiscal
2022
Q4 net sales $12.1
million, up 5% from last year's $11.5
million
Sprout maintained a top 3 brand position on
Amazon in fiscal 2023 and strong sales levels in all periods
nationally1
Sprout was available in 90% of footprint
the Organic Baby Food market across all 50 U.S. states and
Canada
Company to host a conference call at
5:00 p.m. (Eastern Time) on Tuesday,
July 18, 2023
LAVAL,
QC, July 17, 2023 /PRNewswire/ - Neptune
Wellness Solutions Inc. ("Neptune" or the "Company") (NASDAQ:
NEPT), a consumer-packaged goods 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, 2023.
"Neptune Wellness Solutions has made significant strides in
fiscal 2023, demonstrating our unwavering commitment to growth and
innovation in the consumer-packaged goods space. Our brands, Sprout
and Biodroga, have been instrumental in propelling our platform
this year," said Michael Cammarata,
CEO and President of Neptune Wellness Solutions. "With Sprout's
expansion into the Organic Baby Food market across all 50 U.S.
states and Canada, we are
strategically focused on delivering high-quality, sustainable
products to our customers. We're excited about the cost savings and
efficiencies we've achieved, but we acknowledge there's more work
to be done. As we transition into fiscal 2024, we remain dedicated
to further optimizing our operations and improving our financial
position. We recognize there are risks ahead, but we are confident
that the platform we are building is the right move for our
future."
Raymond P. Silcock, Chief
Financial Officer of Neptune added, "As well as growing our key
focus business areas of Sprout and Biodroga, Neptune is focused on
further reducing corporate costs, managing expenses and improving
its liquidity position into fiscal 2024. We are focused on further
optimizing the supply chain for Sprout, and we have restructured
production planning with $2.6 million
in cost savings for the remainder of fiscal 2023 expected."
|
__________________________
|
|
1 Nielsen data from 52 weeks to
4/22/23.
|
Fourth Quarter and Full Year Financial Highlights:
- Fiscal fourth quarter revenue totaled $12.1 million, as compared to $11.5 million for the same period last year.
- Fiscal year 2023 revenue totaled $52.6
million, an increase of $3.8
million or 7.8% as compared to $48.8
million for fiscal 2022.
- Reported gross profit (loss) of $(2.5)
million for fiscal 2023, compared to $(7.5) million for fiscal 2022, an improvement of
$5.0 million or 67%.
- Reported gross profit (loss) for the fourth fiscal quarter of
$(2.6) million compared to
$(5.7) million for the prior
corresponding period, an improvement of $3.1
million or 55%.
- Reported fourth quarter net profit (loss) of $(44.5) million compared to a reported net profit
(loss) of $(36.7) million in the
comparable period in fiscal 2022 and reported fiscal year 2023 net
profit (loss) of $(88.8) million
compared to a net profit (loss) of $(84.4)
million for the fiscal year 2022.
- Adjusted EBITDA (non-GAAP)1 profit (loss) for fiscal
year 2023 was $(39.7) million
compared to an Adjusted EBITDA (non-GAAP)1 profit (loss)
of $(53.3) million for the fiscal
year 2022, an improvement of 26%.
- Cash and cash equivalents were $2.0
million, as of March 31,
2023.
Fourth Quarter & Recent Business Highlights:
- Expanded Sprout Organics CoComelon co-branded organic baby food
into Target stores.
- Sprout extended distribution so its products are now available
in 90% of Organic Baby Food footprint in the market, all 50 U.S.
states and Canada, with recent
launch into Loblaws, the largest grocer in Canada and shipping direct-to-consumers
through the Sprout website.
- Sprout continued to optimize its supply chain and expects to
achieve $2.6 million in cost savings
for the remainder of calendar 2023 due to restructured production
planning.
- Sprout's sales are maintaining a top 3 brand position on Amazon
in fiscal 2023 and strong sales levels in all periods nationally,
according to Nielsen data.
- On a fiscal year to date basis, Sprout's fill rate has improved
to 90%, compared to 73% for the same period last year.
- At +12%, Sprout's sales growth outperformed the Total Shelf
Stable Baby Food category2.
- Biodroga reported gross margins of 28%, up from 25% the same
period year prior. Revenue for fiscal 2023 totaled $14.9 million, an increase of 18% as compared to
fiscal 2022.
Fourth Quarter & Recent Corporate Highlights:
- Announced closing of debt financing for $4 million, improving the Company's capital
position.
- Announced an accounts receivable factoring facility of up to
$7.5 million for its Sprout Organics
baby food brand.
- Extended the maturity of its existing $13 million secured promissory note for Sprout
with Morgan Stanley Expansion Capital.
Conference Call Details:
The Company will host a
conference call at 5:00 p.m. (Eastern Time)
on Tuesday, July 18, 2023, 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.
|
___________________________
|
|
2 Nielsen
data from 13 weeks to 4/1/23
|
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 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, 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. 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. Adjusting for these items does
not imply they are non-recurring.
About Neptune Wellness Solutions
Inc.
Neptune is a consumer-packaged goods company that aims to
innovate health and wellness products. Founded in 1998 and
headquartered in Laval, Quebec,
the Company focuses on developing a portfolio of high-quality,
affordable consumer products that align with the latest market
trends for natural, sustainable, plant-based and purpose-driven
lifestyle brands. The Company's products are available in more than
27,000 retail locations and include well-known organic food and
beverage brands such as Sprout Organics, Nosh, and Nurturme, as
well as nutraceuticals brands like Biodroga and Forest Remedies. With its efficient and
adaptable manufacturing and supply chain infrastructure, the
Company can quickly respond to consumer demand, and introduce new
products through retail partners and e-commerce channels. Please
visit neptunewellness.com for more details.
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 ability to achieve cost savings and
efficiencies and optimizing supply chains.
Consolidated Balance Sheets
(In U.S.
dollars)
|
|
As at
|
|
As at
|
|
|
March 31,
2023
|
|
March 31,
2022
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$1,993,257
|
|
$8,726,341
|
|
Short-term
investment
|
|
17,540
|
|
19,255
|
|
Trade and other
receivables
|
|
7,507,333
|
|
7,599,584
|
|
Prepaid
expenses
|
|
1,025,969
|
|
3,983,427
|
|
Inventories
|
|
13,006,074
|
|
17,059,406
|
|
Total current
assets
|
|
23,550,173
|
|
37,388,013
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
1,403,264
|
|
21,448,123
|
|
Operating lease
right-of-use assets
|
|
1,941,347
|
|
2,295,263
|
|
Intangible
assets
|
|
1,607,089
|
|
21,655,035
|
|
Goodwill
|
|
2,426,385
|
|
22,168,288
|
|
Total assets
|
|
$30,928,258
|
|
$104,954,722
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Trade and other
payables
|
|
$27,051,561
|
|
$22,700,849
|
|
Current portion of
operating lease liabilities
|
|
339,620
|
|
641,698
|
|
Loans and
borrowings
|
|
7,538,369
|
|
—
|
|
Deferred
revenues
|
|
—
|
|
285,004
|
|
Provisions
|
|
2,948,340
|
|
1,118,613
|
|
Liability related to
warrants
|
|
3,156,254
|
|
5,570,530
|
|
Total current
liabilities
|
|
41,034,144
|
|
30,316,694
|
|
|
|
|
|
|
Operating lease
liabilities
|
|
2,017,888
|
|
2,063,421
|
|
Loans and
borrowings
|
|
15,412,895
|
|
11,648,320
|
|
Other
liability
|
|
24,000
|
|
88,688
|
|
Total
liabilities
|
|
58,488,927
|
|
44,117,123
|
|
|
|
|
|
|
Shareholders' Equity
(Deficiency):
|
|
|
|
|
|
Share capital -
without par value (11,996,387 shares issued and outstanding as
of
March 31, 2023; 5,560,829 shares
issued and outstanding as of March 31, 2022)
|
|
321,946,102
|
|
317,051,125
|
|
Warrants
|
|
6,155,323
|
|
6,079,890
|
|
Additional paid-in
capital
|
|
58,138,914
|
|
55,980,367
|
|
Accumulated other
comprehensive loss
|
|
(14,538,830)
|
|
(7,814,163)
|
|
Deficit
|
|
(383,641,363)
|
|
(323,181,697)
|
|
Total equity
(deficiency) attributable to equity holders of the
Company
|
|
(11,939,854)
|
|
48,115,522
|
|
|
|
|
|
|
Non-controlling
interest
|
|
(15,620,815)
|
|
12,722,077
|
|
Total shareholders'
equity (deficiency)
|
|
(27,560,669)
|
|
60,837,599
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
Subsequent
events
|
|
|
|
|
|
Total liabilities and
shareholders' equity (deficiency)
|
|
$30,928,258
|
|
$104,954,722
|
|
See accompanying notes
to the consolidated financial statements.
|
Consolidated Statements of Loss and Comprehensive
Loss
(In U.S. dollars)
|
|
|
|
|
|
|
Years ended
|
|
|
|
March 31,
2023
|
|
March 31,
2022
|
|
|
|
|
|
|
|
Revenue from sales, net
of excise taxes
of $643,476 (2022 - $1,877,543)
|
|
$51,744,817
|
|
$47,695,828
|
|
Royalty
revenues
|
|
818,584
|
|
1,019,861
|
|
Other
revenues
|
|
51,937
|
|
81,435
|
|
Total
revenues
|
|
52,615,338
|
|
48,797,124
|
|
|
|
|
|
|
|
Cost of sales other
than impairment loss on inventories,
net of subsidies of nil (2022 -
$924,644)
|
|
(49,591,156)
|
|
(52,561,404)
|
|
Impairment loss on
inventories
|
|
(5,498,347)
|
|
(3,772,066)
|
|
Total Cost of
sales
|
|
(55,089,503)
|
|
(56,333,470)
|
|
Gross profit
(loss)
|
|
(2,474,165)
|
|
(7,536,346)
|
|
|
|
|
|
|
|
Research and
development expenses
|
|
(484,224)
|
|
(880,151)
|
|
Selling, general and
administrative expenses, net of subsidies
of nil (2022 - $99,840 )
|
|
(46,424,295)
|
|
(60,538,424)
|
|
Impairment loss related
to intangible assets
|
|
(17,979,060)
|
|
(1,527,000)
|
|
Impairment loss related
to property, plant and equipment
|
|
—
|
|
(14,765,582)
|
|
Impairment loss on
assets held for sale
|
|
(15,346,119)
|
|
—
|
|
Impairment loss on
right of use assets
|
|
(424,454)
|
|
—
|
|
Impairment loss related
to goodwill
|
|
(19,542,436)
|
|
(3,288,847)
|
|
Net gain (loss) on sale
of property, plant and equipment
|
|
(172,945)
|
|
6,469
|
|
Loss from operating
activities
|
|
(102,847,698)
|
|
(88,529,881)
|
|
|
|
|
|
|
|
Finance
income
|
|
1,445
|
|
7,123
|
|
Finance
costs
|
|
(3,824,030)
|
|
(2,143,978)
|
|
Loss on issuance of
derivatives
|
|
(3,156,569)
|
|
—
|
|
Foreign exchange gain
(loss)
|
|
6,434,510
|
|
(685,708)
|
|
Change in revaluation
of marketable securities
|
|
—
|
|
(107,203)
|
|
Gain on revaluation of
derivatives
|
|
14,709,805
|
|
7,035,118
|
|
Loss on settlement of
liability
|
|
(120,021)
|
|
—
|
|
|
|
14,045,140
|
|
4,105,352
|
|
Loss before income
taxes
|
|
(88,802,558)
|
|
(84,424,529)
|
|
|
|
|
|
|
|
Income tax
recovery
|
|
—
|
|
—
|
|
Net loss
|
|
(88,802,558)
|
|
(84,424,529)
|
|
|
|
|
|
|
|
Other comprehensive
income (loss)
|
|
|
|
|
|
Net change in
unrealized foreign currency gains (losses)
on translation of net investments in
foreign operations
(tax effect of nil for all
periods)
|
|
(6,724,667)
|
|
750,248
|
|
Total other
comprehensive income (loss)
|
|
(6,724,667)
|
|
750,248
|
|
|
|
|
|
|
|
Total comprehensive
loss
|
|
$(95,527,225)
|
|
$(83,674,281)
|
|
|
|
|
|
|
|
Net loss attributable
to:
|
|
|
|
|
|
Equity holders of the
Company
|
|
$(60,459,666)
|
|
$(74,971,745)
|
|
Non-controlling
interest
|
|
(28,342,892)
|
|
(9,452,784)
|
|
Net loss
|
|
$(88,802,558)
|
|
$(84,424,529)
|
|
|
|
|
|
|
|
Total comprehensive
loss attributable to:
|
|
|
|
|
|
Equity holders of the
Company
|
|
$(67,184,333)
|
|
$(74,218,802)
|
|
Non-controlling
interest
|
|
(28,342,892)
|
|
(9,455,479)
|
|
Total comprehensive
loss
|
|
$(95,527,225)
|
|
$(83,674,281)
|
|
|
|
|
|
|
|
Basic loss per share
attributable to:
|
|
|
|
|
|
Common Shareholders of
the Company
|
|
$(5.12)
|
|
$(15.54)
|
|
|
|
|
|
|
|
Diluted loss per share
attributable to:
|
|
|
|
|
|
Common Shareholders of
the Company
|
|
$(5.12)
|
|
$(15.54)
|
|
|
|
|
|
|
|
Basic and diluted
weighted average number of common shares
|
|
11,812,337
|
|
4,824,336
|
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following table sets out selected consolidated financial
information and are prepared in accordance with US GAAP.
|
|
Three-month periods
ended
|
Twelve-month periods
ended
|
|
|
March 31,
2023
|
|
March 31,
2022
|
|
March 31,
2023
|
|
March 31,
2022
|
|
|
|
|
Recasted
|
|
|
|
Recasted
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Total
revenues
|
|
12.147
|
|
11.532
|
|
52.615
|
|
48.797
|
|
Adjusted
EBITDA1
|
|
(12.963)
|
|
(12.762)
|
|
(39.660)
|
|
(53.258)
|
|
Net loss
|
|
(44.513)
|
|
(36.662)
|
|
(88.803)
|
|
(84.425)
|
|
Net loss attributable
to equity holders of the
Company
|
|
(26.566)
|
|
(31.942)
|
|
(60.460)
|
|
(74.972)
|
|
Net loss attributable
to non-controlling interest
|
|
(17.947)
|
|
(4.720)
|
|
(28.343)
|
|
(9.453)
|
|
Basic and diluted loss
per share
|
|
(3.74)
|
|
(7.47)
|
|
(7.52)
|
|
(17.50)
|
|
Basic and diluted loss
attributable
to common shareholders of the
Company
|
|
(2.23)
|
|
(6.51)
|
|
(5.12)
|
|
(15.54)
|
|
|
As at
March 31, 2023
|
|
As at
March 31, 2022
|
|
As at
March 31, 2021
|
|
|
$
|
|
$
|
|
$
|
|
Total assets
|
|
30.928
|
|
104.955
|
|
186.948
|
|
Working
capital2
|
|
(17.484)
|
|
7.071
|
|
54.718
|
|
Non-current financial
liabilities
|
|
17.455
|
|
13.800
|
|
14.593
|
|
(Deficiency) equity
attributable to equity holders of the Company
|
|
(11.940)
|
|
48.116
|
|
115.368
|
|
(Deficiency) equity
attributable to non-controlling interest
|
|
(15.621)
|
|
12.722
|
|
22.178
|
|
1 The
Adjusted EBITDA is a non-GAAP measure. It is not a standard measure
endorsed by US GAAP requirements. A reconciliation to the Company's
net loss is presented below. In the quarter ended September 30,
2022, the Company recasted comparative Adjusted EBITDA to conform
to its current definition. As a result, the following adjustments
were removed in the current and comparative quarters: litigation
provisions, business acquisition and integration costs, signing
bonus, severance and related costs, and write-down of inventories
and deposits.
|
|
2 Working capital is calculated by
subtracting current liabilities from current assets. Because there
is no standard method endorsed by US GAAP, the results may not be
comparable to similar measurements presented by other public
companies. Current assets as at March 31, 2023, 2022 and 2021 were
$23.550, $37.388 and $89.528 respectively, and current liabilities
as at March 31, 2023, 2022 and 2021 were $41.034, $30.317 and
$34.809 respectively.
|
NON-GAAP FINANCIAL PERFORMANCE MEASURES
The Company uses one adjusted financial measure, Adjusted
Earnings Before Interest, Taxes, Depreciation and Amortization
("Adjusted EBITDA") to assess its operating performance. This
non-GAAP financial measure is presented in a consistent manner,
unless otherwise disclosed. The Company uses this measure for the
purposes of evaluating its historical and prospective financial
performance, as well as its performance relative to competitors.
The measure also helps the Company to plan and forecast for future
periods as well as to make operational and strategic decisions. The
Company believes that providing this information to investors, in
addition to its GAAP financial statements, allows them to see the
Company's results through the eyes of Management, and to better
understand its historical and future financial performance.
Neptune's method for calculating Adjusted EBITDA may differ from
that used by other corporations.
A reconciliation of net loss to Adjusted EBITDA is presented
below.
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 excluding from
its net loss the following items: net finance costs (income),
depreciation and amortization, and income tax expense (recovery).
Other items such as equity classified stock-based compensation,
non-employee compensation related to warrants, impairment losses on
non-financial assets, revaluations of derivatives, costs related to
conversion from IFRS to US GAAP and other changes in fair values
are also added back to Neptune's net loss. 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, impairment losses, revaluations of derivatives
and other changes in fair values eliminates the non-cash impact of
such items, and the exclusion of costs related to conversion from
IFRS to US GAAP, together with the other exclusions discussed
above, 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. 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.
In the quarter ended September 30,
2022, the Company recast comparative Adjusted EBITDA to
conform to the current definition. As a result, the following
adjustments were removed in the current and comparative quarters:
litigation provisions, business acquisition and integration costs,
signing bonus, severance and related costs, D&O insurance and
write-down of inventories and deposits.
Adjusted EBITDA1 reconciliation, in millions of
dollars
|
|
Three-month periods
ended
|
|
Twelve-month periods
ended
|
|
|
March 31,
2023
|
|
March 31,
2022
|
|
March 31,
2023
|
|
March 31,
2022
|
|
|
0
|
|
Recasted
|
|
|
|
Recasted
|
|
|
|
|
|
|
|
|
|
|
Net loss for the
year
|
|
$(44.513)
|
|
$(36.662)
|
|
$(88.803)
|
|
$(84.425)
|
|
Add
(deduct):
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
0.843
|
|
1.656
|
|
3.234
|
|
6.791
|
|
Revaluation of
derivatives
|
|
1.374
|
|
1.672
|
|
(14.710)
|
|
(7.035)
|
|
Net finance
costs
|
|
1.166
|
|
1.266
|
|
3.823
|
|
2.823
|
|
Equity classified
stock-based compensation
|
|
0.671
|
|
1.565
|
|
3.504
|
|
7.817
|
|
Non-employee
compensation related to warrants
|
|
—
|
|
—
|
|
—
|
|
0.179
|
|
System migration,
conversion, implementation
|
|
—
|
|
(0.001)
|
|
—
|
|
0.327
|
|
Impairment loss on
long-lived assets
|
|
27.511
|
|
17.177
|
|
53.292
|
|
19.581
|
|
Costs related to
conversion from IFRS to US GAAP
|
|
—
|
|
0.577
|
|
—
|
|
0.577
|
|
Change in revaluation
of marketable securities
|
|
—
|
|
—
|
|
—
|
|
0.107
|
|
Income tax
recovery
|
|
(0.015)
|
|
(0.012)
|
|
—
|
|
—
|
|
Adjusted
EBITDA1
|
|
$(12.963)
|
|
$(12.762)
|
|
$(39.660)
|
|
$(53.258)
|
|
1 The
Adjusted EBITDA is not a standard measure endorsed by US GAAP
requirements. In the quarter ended September 30, 2022, the Company
recasted comparative Adjusted EBITDA to conform to its current
definition. As a result, the following adjustments were removed in
the current and comparative quarters: litigation provisions,
business acquisition and integration costs, signing bonus,
severance and related costs, and write-down of inventories and
deposits
|
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SOURCE Neptune Wellness Solutions Inc.