On Track and On Budget to Complete Phase 1
of the Cannabis Business Plan
Phase 2 capacity
expansion approved by the Board
Year-end Financial and Operational Highlights for the
12-month period ended March 31, 2018
compared to the 13-month period ended March
31, 20171
- Cannabis Business site investments related to licensing
process, on track and on budget; extensive commercial activities
initiated.
- Revenues of $26.2 million, a
decrease of $20.7 million, reflecting
the sale of the krill oil manufacturing business on August 7, 2017; revenues for 2017 were
$46.9 million for 13-month
period.
- Strong contribution from our speciality patented ingredient
MaxSimil.
- Gain of $23.7 million from the
sale of our krill manufacturing business to Aker BioMarine.
- Gain of $8.8 million realized
from the deconsolidation of Acasti Pharma.
- Net income of $20.1 million
versus $9.6 million in the prior
year.
- Non-IFRS operating loss2 was $2.6
million compared to an Adjusted EBITDA2 of
$4.1 million in the prior year
reflecting investment in cannabis business development.
- Strong cash position of $26.7
million as of March 31,
2018.
Q4 Financial and Operational Highlights for the 3-month
period ended March 31, 2018 compared
to the 4-month period ended March 31,
20171
- Revenues of $7.0 million reflect
a 14.9% increase in the Solutions Business over the comparable
3-month period last year and represent the best quarter since the
Biodroga acquisition. This compares with revenues of $11.8 million for four-month period ended
March 31, 2017 which included the
krill oil manufacturing business prior to its divestiture.
- Net loss of $4.8 million versus a
net income of $0.3 million in the
prior year.
- Non-IFRS operating loss2 was $1.8
million compared to an Adjusted EBITDA2 of $0.9 million in the prior year reflecting
investment in cannabis business development.
- Announcement of a Co-Development Agreement for Purified
Cannabinoid Oil-Based Products targeting Pain and inflammation with
Tetra Biopharma.
________________________
|
1
Excluding cardiovascular segment.
|
2 See
"Caution Regarding Non-IFRS Financial Measures" and "Reconciliation
of net income (loss) to Adjusted EBITDA or non-IFRS operating loss"
which follow.
|
LAVAL, QC, June 5, 2018 /CNW Telbec/ - Neptune Technologies
& Bioressources Inc. ("Neptune" or the "Corporation") (NASDAQ:
NEPT) (TSX: NEPT), today announced its financial and operating
results for the 3-month and 12-month periods ended March 31, 2018. All amounts are in Canadian
dollars.
![Logo: Neptune Technologies & Bioressources Inc. (CNW Group/Neptune Technologies & Bioresources inc.) Logo: Neptune Technologies & Bioressources Inc. (CNW Group/Neptune Technologies & Bioresources inc.)](https://mma.prnewswire.com/media/701694/Neptune_Technologies___Bioresources_inc__Neptune_Announces_Fourt.jpg)
"During the fourth quarter, we sustained an intense pace of
activity in developing the cannabis business opportunity, meeting
with potential suppliers and partners while continuing to move
forward with the regulatory licensing process. As of today,
having committed more than 90% of our $5
million approved capital plan to work on site security,
license compliance and CO2 extraction, we remain on
track and on budget to complete the first Phase of our cannabis
commercialization strategy in the middle of 2018.
Simultaneously, we began work on Phase II and successfully
completed solvent lab scale trials. As a consequence, we are very
excited that the Board approved the $4.8
million investment for Phase 2 capacity expansion," said
Jim Hamilton, President and Chief
Executive Officer of Neptune
"Fourth quarter revenue from our Solutions Business was the best
quarter ever and grew 14.9% year-over-year when using the
comparable 3-month periods. As we move into fiscal 2019, we are
keenly focused on executing our strategy to establish Neptune as an
innovative health and wellness products company focused on the
extraction, purification and formulation of cannabis oil
ingredients and differentiated products to serve customers
globally. With a healthy cash balance of $26.7 million at year-end derived from exiting
the krill oil manufacturing business, we have the financial
strength to fund our cannabis business opportunity through
commercialization based on our current timeline of developments,"
concluded Mr. Hamilton.
Nutraceutical and Cannabis Business Results
As previously announced, Neptune transitioned to a new fiscal
year-end as at March 31, 2017. As a
result, the comparative periods covers the four and thirteen-month
periods ended March 31, 2017 and may
not be directly comparable to the figures of the 2018 fiscal
year.
Fourth Quarter Financial Results
- Revenues were $7.0 million for
the three-month period ended March 31,
2018, versus $11.8 million for
the four-month period ended March 31,
2017.
- Net loss was $4.8 million for the
current quarter, versus a net income of $0.3
million for the four-month period ended March 31, 2017.
- Non-IFRS operating loss1 was $1.8 million for the current quarter, compared to
an Adjusted EBITDA1 of $0.9
million for the four-month period ended March 31, 2017.
The fourth quarter Non-IFRS operating loss1 increase
was mainly attributable to the sales and gross margin decrease
after the transaction concluded with Aker BioMarine. The fourth
quarter net loss includes derecognition of tax credits of
$1.9 million, an income taxes
recovery of $1.7 million and an
impairment loss on inventories of $0.7
million.
Year Ended Financial Results
- Revenues were $27.6 million for
the year ended March 31, 2018, versus
$46.9 million for the thirteen-month
period ended March 31, 2017.
- Net income was $20.1 million for
the year ended March 31, 2018, versus
$9.6 million for the thirteen-month
period ended March 31, 2017.
- Non-IFRS operating loss1 was $2.6 million for the year ended March 31, 2018, compared to an Adjusted
EBITDA1 of $4.1 million
for the thirteen-month period ended March
31, 2017.
The year ended Non-IFRS operating loss1 increase was
mainly attributable to the sales and gross margin decrease after
the transaction concluded with Aker BioMarine. The year ended net
income includes a gain on sale of assets of $23.7 million, a gain on loss of control of a
subsidiary of $8.8 million,
derecognition of tax credits of $1.9
million, an income taxes recovery of $1.6 million and an impairment loss on
inventories of $2.4 million.
Consolidated Results (including Acasti Pharma until the loss
of control on December 27,
2017)
Fourth Quarter Financial Results
- Consolidated revenues were $7.0
million for the three-month period ended March 31, 2018, versus $11.8 million for the four-month period ended
March 31, 2017.
- Net loss was $4.8 million for the
current quarter, versus $2.3 million
for the four-month period ended March 31,
2017.
- Non-IFRS operating loss1 was $1.8 million for the current quarter, compared to
$1.2 million for the four-month
period ended March 31, 2017.
The fourth quarter ended March 31,
2018 does not include any financial results of Acasti.
Year-to-Date Financial Results
- Consolidated revenues were $27.6
million for the year ended March 31,
2018, versus $46.8 million for
the thirteen-month period ended March 31,
2017.
- Net income was $9.3 million for
the year ended March 31, 2018, versus
$0.9 million for the thirteen-month
period ended March 31, 2017.
- Non-IFRS operating loss1 was $12.3 million for the year ended March 31, 2018, compared to $3.7 million for the thirteen-month period ended
March 31, 2017.
On a consolidated basis, until the loss of control on
December 27, 2017, the year ended
March 31, 2018 includes a Non-IFRS
operating loss1 of $9.7
million and a net loss of $12.5
million for Neptune's subsidiary, Acasti, which is actively
engaged in clinical studies and research and development. For the
thirteen-month period ended March 31,
2017, Acasti recorded a Non-IFRS operating loss1
of $7.8 million and a net loss of
$11.2 million.
Cash and cash equivalents, including $2.4
million of restricted short-term investments, were
$26.7 million as at
March 31, 2018.
Caution Regarding Non-IFRS Financial
Measures
The Corporation uses an adjusted financial
measure, Adjusted Earnings Before Interest, Taxes,
Depreciation and Amortization (EBITDA) called non-IFRS operating
loss when the Corporation or segment is in a loss position,
to assess its operating performance. This non-IFRS financial
measure is directly derived from the Corporation's financial
statements and is presented in a consistent manner. The Corporation
uses this measure for the purposes of evaluating its historical and
prospective financial performance, as well as its performance
relative to competitors. This measure also helps the Corporation to
plan and forecast for future periods as well as to make operational
and strategic decisions. The Corporation believes that providing
this information to investors, in addition to IFRS measures, allows
them to see the Corporation's results through the eyes of
management, and to better understand its historical and future
financial performance.
Securities regulations require that companies caution readers
that earnings and other measures adjusted to a basis other than
IFRS do not have standardized meanings and are unlikely to be
comparable to similar measures used by other companies.
Accordingly, they should not be considered in isolation. The
Corporation uses Adjusted EBITDA (or non-IFRS operating loss when
in a loss position) to measure its performance from one period to
the next without the variation caused by certain adjustments that
could potentially distort the analysis of trends in our operating
performance, and because the Corporation believes it provides
meaningful information on the Corporation financial condition and
operating results. Neptune's method for calculating Adjusted EBITDA
(or non-IFRS operating loss) may differ from that used by other
corporations.
Neptune obtains its Adjusted EBITDA (or non-IFRS operating
loss) measurement by adding to net income (loss), finance costs,
depreciation, amortization and impairment loss and income taxes
expense and by subtracting finance income and income taxes
recovery. Other items such as stock-based compensation, change in
fair value of derivative assets and liabilities and loss on sale of
available-for-sale investment, royalty settlements, net gain on
sale of assets from the krill oil business, legal fees related to
royalty settlements, gain on loss of control of subsidiary, tax
credits recoverable from prior years, reversal of tax credits from
prior years and acquisition costs that do not impact core operating
performance of the Corporation are excluded from the calculation as
they may vary significantly from one period to
another. Excluding these items does not imply they are
non-recurring.
Conference Call Details
Neptune will be holding a
conference call on June 5, 2018, at
5:00 PM (EST) to discuss its fourth
quarter and fiscal year-end results ended March 31, 2018.
Date:
|
Tuesday, June 5,
2018
|
|
|
Time:
|
5:00 PM Eastern
Standard Time
|
|
|
Call:
|
1 (877) 223-4471
(within Canada & the U.S.)
|
|
1 (647) 788-4922
(Outside Canada and the U.S.)
|
|
|
Webcast:
|
A live audio webcast
and presentation of the results can be accessed at:
http://neptunecorp.com/en/investors/events-and-presentations/
|
A replay of the call will be available for replay two hours
after the call's completion, until July 5,
2018. The telephone numbers to access the replay of the call
are 1 (416) 621-4642 or 1 (800) 585-8367 (toll-free), Conference ID
2993468. The archive of the webcast, along with its accompanying
presentation, will also be made available immediately in the
Investors section of Neptune's website under Investor
Events and Presentations.
About Neptune Technologies & Bioressources Inc.
Neptune is a wellness products company, with more than 50 years of
combined experience in the industry. The Company formulates and
develops turnkey solutions available in various unique delivery
forms, offers specialty ingredients such as MaxSimil®, a patented
ingredient that may enhance the absorption of lipid-based
nutraceuticals, and a variety of other marine and seed oils.
Neptune also sells premium krill oil directly to consumers through
web sales at www.oceano3.com. Leveraging our scientific,
technological and innovative expertise, Neptune is working to
develop unique extracts and formulations in high potential growth
segments such as medical and wellness cannabinoid-based
products.
The Company's head office is located in Laval, Quebec.
Forward Looking Statements
Statements in this press
release that are not statements of historical or current fact
constitute "forward-looking statements" within the meaning of the
U.S. securities laws and Canadian securities laws. Such
forward-looking statements involve known and unknown risks,
uncertainties, and other unknown factors that could cause the
actual results of Neptune to be materially different from
historical results or from any future results expressed or implied
by such forward-looking statements. In addition to statements which
explicitly describe such risks and uncertainties, readers are urged
to consider statements labeled with the terms "believes," "belief,"
"expects," "intends," "anticipates," "will," "should," or "plans"
to be uncertain and forward-looking. Readers are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date of this press release.
The forward-looking statements contained in this press
release are expressly qualified in their entirety by this
cautionary statement and the "Cautionary Note Regarding
Forward-Looking Information" section contained in Neptune's latest
Annual Information Form (the "AIF"), which also forms part of
Neptune's latest annual report on Form 40-F, and which is available
on SEDAR at www.sedar.com, on EDGAR at
www.sec.gov/edgar.shtml and on the investor section of
Neptune's website at www.neptunecorp.com. All
forward-looking statements in this press release are made as of the
date of this press release. Neptune does not undertake to update
any such forward-looking statements whether as a result of new
information, future events or otherwise, except as required by law.
The forward-looking statements contained herein are also subject
generally to other risks and uncertainties that are described from
time to time in Neptune public securities filings with the
Securities and Exchange Commission and the Canadian securities
commissions. Additional information about these assumptions and
risks and uncertainties is contained in the AIF under "Risk
Factors" and in our MD&A for the year ended March 31, 2018 under "Risks and
uncertainties".
Neither NASDAQ nor the Toronto Stock Exchange accepts
responsibility for the adequacy or accuracy of this
release.
________________________
|
1 See
"Caution Regarding Non-IFRS Financial Measures" and "Reconciliation
of net income (loss) to Adjusted EBITDA or non-IFRS operating loss"
which follow.
|
Reconciliation of
net loss to non-IFRS operating loss1
|
(Expressed in
thousands of dollars)
|
|
Three-month period
ended March 31, 2018
|
|
|
|
|
|
Nutraceutical
|
Cannabis
|
Total
|
|
$
|
$
|
$
|
Total
revenues
|
7,005
|
–
|
7,005
|
Gross
margin
|
1,458
|
–
|
1,458
|
R&D
expenses
|
(54)
|
(1,836)
|
(1,890)
|
R&D tax credits
and grants
|
(1,898)
|
–
|
(1,898)
|
SG&A
|
(3,673)
|
–
|
(3,673)
|
Other income – net
gain on sale of assets
|
(21)
|
–
|
(21)
|
Loss from operating
activities
|
(4,188)
|
(1,836)
|
(6,024)
|
Net finance
cost
|
(408)
|
–
|
(408)
|
Income taxes
recovery
|
1,680
|
–
|
1,680
|
Net loss
|
(2,916)
|
(1,836)
|
(4,752)
|
Non-IFRS operating
loss1 calculation
|
|
|
|
Net loss
|
(2,916)
|
(1,836)
|
(4,752)
|
Add
(deduct):
|
|
|
|
|
Depreciation and
amortization
|
238
|
530
|
768
|
|
Finance
costs
|
107
|
–
|
107
|
|
Finance
income
|
(81)
|
–
|
(81)
|
|
Change in fair value
of derivative assets and liabilities and loss on sale
of available-for-sale
investment
|
382
|
–
|
382
|
|
Stock-based
compensation
|
656
|
186
|
842
|
|
Income taxes
recovery
|
(1,680)
|
–
|
(1,680)
|
|
Impairment loss on
inventories
|
658
|
–
|
658
|
|
Net gain on sale of
assets
|
21
|
–
|
21
|
|
Tax credits reversal
from prior years
|
1,933
|
–
|
1,933
|
Non-IFRS operating
loss1
|
(682)
|
(1,120)
|
(1,802)
|
Reconciliation of
net income (loss) to Adjusted EBITDA1 or non-IFRS
operating loss1
|
(Expressed in
thousands of dollars)
|
|
Four-month period
ended March 31, 2017
|
|
Nutraceutical
|
Cardiovascular
|
Inter-segment
eliminations
|
Total
|
|
$
|
$
|
$
|
$
|
Total
revenues
|
11,829
|
–
|
–
|
11,829
|
Gross
margin
|
3,238
|
–
|
–
|
3,238
|
R&D
expenses
|
(664)
|
(2,136)
|
774
|
(2,026)
|
R&D tax credits
and grants
|
2,059
|
152
|
–
|
2,211
|
SG&A
|
(3,306)
|
(1,305)
|
–
|
(4,611)
|
Other income –
royalty settlements
|
2,185
|
–
|
–
|
2,185
|
Income (loss) from
operating activities
|
3,512
|
(3,289)
|
774
|
997
|
Net finance
cost
|
(822)
|
(207)
|
5
|
(1,024)
|
Income taxes expense
(recovery)
|
(2,400)
|
129
|
–
|
(2,271)
|
Net income
(loss)
|
290
|
(3,367)
|
779
|
(2,298)
|
Adjusted
EBITDA1 (non-IFRS operating loss)1
calculation
|
|
|
|
|
Net income
(loss)
|
290
|
(3,367)
|
779
|
(2,298)
|
Add
(deduct):
|
|
|
|
|
|
Depreciation and
amortization
|
1,207
|
894
|
(774)
|
1,327
|
|
Finance
costs
|
873
|
67
|
–
|
940
|
|
Finance
income
|
(30)
|
(9)
|
–
|
(39)
|
|
Change in fair value
of derivative assets and liabilities
|
(21)
|
149
|
(5)
|
123
|
|
Stock-based
compensation
|
356
|
245
|
–
|
601
|
|
Income taxes expense
(recovery)
|
2,400
|
(129)
|
–
|
2,271
|
|
Tax credits
recoverable from prior years
|
(1,967)
|
–
|
–
|
(1,967)
|
|
Royalty
settlements
|
(2,185)
|
–
|
–
|
(2,185)
|
Adjusted
EBITDA1 (non-IFRS operating
loss)1
|
923
|
(2,150)
|
–
|
(1,227)
|
Reconciliation of
net income (loss) to non-IFRS operating
loss1
|
(Expressed in
thousands of dollars)
|
|
Year ended March
31, 2018
|
|
Nutraceutical
|
Cannabis
|
Cardiovascular(i)
|
Inter-segment
eliminations
|
Total
|
|
$
|
$
|
$
|
$
|
$
|
Total
revenues
|
27,646
|
–
|
–
|
–
|
27,646
|
Gross
margin
|
6,324
|
–
|
–
|
–
|
6,324
|
R&D
expenses
|
(896)
|
(3,566)
|
(9,676)
|
1,742
|
(12,396)
|
R&D tax credits
and grants
|
(1,836)
|
–
|
84
|
–
|
(1,752)
|
SG&A
|
(11,947)
|
–
|
(2,761)
|
–
|
(14,708)
|
Other income – net
gain on sale of assets
|
23,702
|
–
|
–
|
–
|
23,702
|
Income (loss) from
operating activities
|
15,347
|
(3,566)
|
(12,353)
|
1,742
|
1,170
|
Gain on loss of
control of the subsidiary Acasti
|
8,784
|
–
|
–
|
–
|
8,784
|
Net finance
cost
|
(2,127)
|
–
|
(121)
|
(7)
|
(2,255)
|
Income taxes
recovery
|
1,640
|
–
|
–
|
–
|
1,640
|
Net income
(loss)
|
23,644
|
(3,566)
|
(12,474)
|
1,735
|
9,339
|
Total assets
(ii)
|
51,057
|
40,954
|
6,586
|
–
|
98,597
|
Cash, cash equivalents and restricted short-term investments
|
26,697
|
–
|
–
|
–
|
26,697
|
Working
capital2
|
27,406
|
(994)
|
–
|
–
|
26,412
|
Non-IFRS operating
loss1 calculation
|
|
|
|
|
|
Net income
(loss)
|
23,644
|
(3,566)
|
(12,474)
|
1,735
|
9,339
|
Add
(deduct):
|
|
|
|
|
|
|
Depreciation and
amortization
|
2,225
|
1,054
|
2,005
|
(1,742)
|
3,542
|
|
Finance
costs
|
2,091
|
–
|
355
|
–
|
2,446
|
|
Finance
income
|
(189)
|
–
|
(38)
|
–
|
(227)
|
|
Change in fair value
of derivative assets and liabilities and loss on sale of
available-for-sale investment
|
225
|
–
|
(196)
|
7
|
36
|
|
Stock-based
compensation
|
1,371
|
252
|
661
|
–
|
2,284
|
|
Income taxes
recovery
|
(1,640)
|
–
|
–
|
–
|
(1,640)
|
|
Impairment loss on
inventories
|
2,377
|
–
|
–
|
–
|
2,377
|
|
Gain on loss of
control of the subsidiary Acasti
|
(8,784)
|
–
|
–
|
–
|
(8,784)
|
|
Net gain on sale of
assets
|
(23,702)
|
–
|
–
|
–
|
(23,702)
|
|
Legal fees related to
royalty settlements
|
90
|
–
|
–
|
–
|
90
|
|
Tax credits reversal
from prior years
|
1,933
|
–
|
|
|
1,933
|
Non-IFRS operating
loss1
|
(359)
|
(2,260)
|
(9,687)
|
–
|
(12,306)
|
|
|
|
|
|
|
(i)
|
Results of operations
for the period starting April 1st, 2017 until December
27, 2017.
|
(ii)
|
The reportable
segment assets of the Cardiovascular segment as at March 31, 2018
consists of the investment in Acasti.
|
Reconciliation of
net income (loss) to Adjusted EBITDA1 or non-IFRS
operating loss1
|
(Expressed in
thousands of dollars)
|
|
Thirteen-month
period ended March 31, 2017
|
|
Nutraceutical
|
Cardiovascular
|
Inter-segment
eliminations
|
Total
|
|
$
|
$
|
$
|
$
|
Total
revenues
|
46,922
|
8
|
(112)
|
46,818
|
Gross
margin
|
12,793
|
8
|
1
|
12,802
|
R&D
expenses
|
(1,774)
|
(7,991)
|
2,516
|
(7,249)
|
R&D tax credits
and grants
|
2,078
|
330
|
–
|
2,408
|
SG&A
|
(13,504)
|
(3,557)
|
–
|
(17,061)
|
Other income –
royalty settlements
|
15,302
|
–
|
–
|
15,302
|
Income (loss) from
operating activities
|
14,895
|
(11,210)
|
2,517
|
6,202
|
Net finance
cost
|
(2,804)
|
(167)
|
2
|
(2,969)
|
Income taxes expense
(recovery)
|
(2,483)
|
129
|
–
|
(2,354)
|
Net income
(loss)
|
9,608
|
(11,248)
|
2,519
|
879
|
Total
assets
|
98,164
|
25,454
|
(12,398)
|
111,220
|
Cash, cash equivalents and restricted short-term investments
|
8,775
|
9,772
|
–
|
18,547
|
Working
capital2
|
17,549
|
8,050
|
1
|
25,600
|
Adjusted
EBITDA1 (non-IFRS operating loss)1
calculation
|
|
|
|
|
Net income
(loss)
|
9,608
|
(11,248)
|
2,519
|
879
|
Add
(deduct):
|
|
|
|
|
|
Depreciation and
amortization
|
3,596
|
2,737
|
(2,516)
|
3,817
|
|
Finance
costs
|
2,623
|
238
|
(89)
|
2,772
|
|
Finance
income
|
(31)
|
(124)
|
89
|
(66)
|
|
Change in fair value
of derivative assets and liabilities
|
212
|
53
|
(2)
|
263
|
|
Stock-based
compensation
|
1,340
|
675
|
–
|
2,015
|
|
Income taxes expense
(recovery)
|
2,483
|
(129)
|
–
|
2,354
|
|
Tax credits
recoverable from prior years
|
(1,967)
|
–
|
–
|
(1,967)
|
|
Royalty
settlements
|
(15,302)
|
–
|
–
|
(15,302)
|
|
Legal fees related to
royalty settlements
|
1,501
|
–
|
–
|
1,501
|
|
Acquisition
costs
|
39
|
–
|
–
|
39
|
Adjusted
EBITDA1 (non-IFRS operating
loss)1
|
4,102
|
(7,798)
|
1
|
(3,695)
|
|
|
|
|
|
_______________________
|
1 See
"Caution Regarding Non-IFRS Financial Measures".
|
2 The
working capital is presented for information purposes only and
represents a measurement of the Corporation's short-term financial
health mostly used in financial circles. The working capital is
calculated by subtracting current liabilities from current assets.
Because there is no standard method endorsed by IFRS, the results
may not be comparable to similar measurements presented by other
public companies.
|
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SOURCE Neptune Technologies & Bioresources inc.