Revenues increase 49% sequentially over Q1
results
Increasing focus on U.S. B2C strategy supported by the IFF
partnership
LAVAL, QC, Nov. 11, 2019 /CNW Telbec/ - Neptune
Wellness Solutions Inc. ("Neptune" or the "Corporation") (NASDAQ:
NEPT) (TSX: NEPT), today announced its financial and operating
results for the three-month period ended September 30, 2019. All amounts are in thousands
of Canadian dollars except specified otherwise.
Second Quarter Financial and Corporate Highlights:
- Total revenues for the three-month period ended September 30, 2019 amounted to $6,512, representing an increase of $2,151 or 49% over the first quarter ended
June 30, 2019 and a decrease of
$559 or 8% compared to $7,071 for the three-month period ended
September 30, 2018.
- Revenues from the Cannabis segment reached $1,220, an increase of $1,182 sequentially from the three-month period
ended June 30, 2019. Neptune started
the commercial operations of its Cannabis segment in March 2019 and hence had no revenues in the prior
year period ended September 30,
2018.
- Revenues from the Nutraceutical segment for the three-month
period ended September 30, 2019
amounted to $5,149, representing an
increase of 20% sequentially, over the first quarter ended
June 30, 2019 and a decrease of
$1,922 or 27% compared to
$7,071 for the three-month period
ended September 30, 2018. The
decrease in revenues was attributable to timing of orders of our
nutrition business.
- Net loss for the three-month period ended September 30, 2019 amounted to $20,775 compared to $3,050 for the three-month period ended
September 30, 2018, an increase of
$17,725. The increase is mainly
attributable to an increase in stock-based compensation expense,
depreciation and amortization and to accretion expense on
contingent consideration combined with a lower Adjusted
EBITDA1.
- Adjusted EBITDA1 decreased by $3,353 for the three-month period ended
September 30, 2019 to ($4,581) compared to the three-month period ended
September 30, 2018. The decrease in
Adjusted EBITDA1 is mainly attributable to investments
made in the cannabis segment to grow the workforce in anticipation
of increased sales volume as well as an increase in salaries and
benefits at the corporate level.
- On July 24, 2019, Neptune
completed the acquisition of the assets of SugarLeaf. Neptune paid
an initial consideration for SugarLeaf of $23.7 million (US$18.1
million), a combination of $15.8
million (US$12 million) in
cash and 7.9 million (US$6.1 million)
or 1,587,301 in common shares.
- On August 14, 2019, Neptune
announced the creation of Neptune Ventures, a strategic investment
arm and technology incubator which is expected to stimulate
innovation and partnerships in the cannabis and wellness
industries.
- On August 22, 2019, Neptune
announced the addition of two new members to its team to support
the company's rapid growth. Neptune appointed Stephen Lijoi, as Vice-President Operations and
José Dominguez as Cannabis Sommelier and Formulation
Specialist.
- In August 2019, Neptune appointed
Mr. Philippe Trudeau to its Board of
Directors. Mr. Trudeau is a visionary leader with extensive
experience in consumer goods. Mr. Trudeau spent 25 years at Trudeau
Corporation, a consumer products company marketed in more than 70
countries, where he held many key positions including president
from 2010 to 2018.
Subsequent to Quarter-end
- On October 4, 2019, Neptune
announced a new strategic partnership with American Media LLC
("American Media") which will provide US$12
million in advertising and creative services to Neptune to
support the marketing and commercialization of Neptune's
consumer-facing brands in the U.S. Neptune will issue 3,000,000
warrants to AMI, each warrant allowing the holder to purchase one
common share of Neptune at an exercise price of US$8.00 per share and with a 5-year expiration
date.
- On October 17, 2019, Neptune
announced that it entered into an agreement to provide extraction
services to a large U.S.-based farming services operation. Under
the contract terms, Neptune will receive hemp biomass to be
processed and transformed into crude oil extracts. The 2-year
agreement could reach a total value in excess of US$20 million.
- On October 17, 2019, the
Corporation announced the appointment of Brett DuBose as Vice-President of Sales for the
U.S. Region. Brett has more than 20 years of sales experience, most
recently with Lonza Consumer Health and Nutrition where he was
Associate Director Sales, for the Eastern U.S and Canada.
- On November 11, 2019, Neptune
announced that it has entered into a definitive agreement with
International Flavors & Fragrances Inc. (NYSE: IFF) to
co-develop hemp-derived CBD products for the mass retail and health
& wellness markets. Under this strategic product development
partnership, IFF will leverage its intellectual property (IP) for
taste, scent, nutrition, and ingredients to provide essential oils
and product development resources. Neptune will leverage its
proprietary cold ethanol extraction processes and formulation IP to
deliver high quality, full and broad-spectrum extracts for the
development, manufacture and commercialization of hemp-derived
products, infused with essential oils, for the cosmetics, personal
care and home care markets. The initial launch will include a
variety of topical products across the aromatherapy category, a
market estimated at approximately $3
billion annually. Neptune will issue 2,000,000 warrants to
IFF, each warrant allowing the holder to purchase one common share
of Neptune at an exercise price of US $12.00 per share and with a 5-year expiration
date.
"We have a strong opportunity in the consumer market, and in
recent months I have been focused on developing our B2B and B2C
strategy for the U.S. market. According to most estimates, the U.S.
hemp-derived CBD market is expected to exceed US$20 billion at retail in the next five years.
This market size is roughly three to four times larger than the
expected size of the Canadian cannabis market and represents our
largest opportunity today. The collaboration agreement with IFF and
the American Media partnership will help raise the awareness of our
CBD brand, Forest Remedies™. We expect to introduce our first
consumer products at retail locations and online with rollout
commencing in the first half of CY2020," stated Michael Cammarata, CEO of Neptune.
"We achieved a significant milestone in mid October when we
completed our Phase II capacity expansion. This additional capacity
will alleviate our constraints in the near-term and help accelerate
the company's revenue growth in the cannabis segment. However, the
start-up of our ethanol process has been longer than initially
expected which has delayed the full ramp-up by one month to the end
of December. With regards to our CO2 operations, we have been
running seven days a week since the end of July and we are pleased
with our yields and quality of extracts." Said Stephen Lijoi, VP Operations.
"I believe we have created a very solid foundation to grow our
company with a well capitalized balance sheet. Moreover, we are at
an inflection point in terms of profitability. The dynamics of the
legal cannabis and hemp extraction markets remain favorable with a
scarcity of biomass extraction capacity in both Canada and the U.S., which should lead to
continued sustained demand for our extraction services. We expect
our revenue growth to accelerate for the remainder of the FY2020
based on the strong demand witnessed for extraction services.
Lastly, we have a comprehensive strategy based on geographic
diversification, and a wide scope of value-added services, as well
as unique and distinctive products," concluded Mr.
Cammarata.
Financial Results
Total revenues reached $6,512 for
the three-month ended September 30,
2019, down versus last year's revenues of $7,071. The majority of the revenues during the
quarter were generated in the Nutraceutical segment. The decline in
total revenues was attributable to timing of orders of our
nutrition business.
For the three-month ended September 30,
2019, Adjusted EBITDA1 was a loss of $4,581 compared with a loss of $1,228 last year. The increased Adjusted
EBITDA1 loss is due to investments made in the cannabis
segment to grow the workforce in anticipation of increased sales
volume as well as an increase in salaries and benefits at the
corporate level. The decrease can also be explained by an increase
in litigation legal fees and additional SG&A coming from
SugarLeaf.
Neptune reported a net loss of $20,775 for the three-month ended September 30, 2019, an increase compared to a net
loss of $3,050 last year. The
increase in net loss is mainly attributable to an increase in
stock-based compensation expense, depreciation and amortization and
accretion expense recognized on contingent consideration as well as
for the same reasons as stated in the Adjusted EBITDA1
section above.
Cash and cash equivalents were $24,399 as of September
30, 2019. On November 6,
2019, Neptune closed a revolving line of credit with a large
Canadian financial institution for an amount of $5 million to
support the nutraceutical segment.
Management Update
This summer Neptune initiated a search process to hire a new
CFO. This process is well underway and the Corporation's new CFO is
expected to be announced in the coming months. Following the
departure of Mario Paradis,
Claudie Lauzon has been appointed
interim CFO of the Company. Ms. Lauzon is the Corporate Controller
of Neptune and has been employed by the Corporation for 10
years.
Official Launch of the Forest
Remedies™ Brand
Our CBD consumer brand, Forest Remedies™, was acquired along
with the purchase of SugarLeaf Labs. Initially, Forest
Remedies™ was used to gain consumer insights on CBD finished
product forms. Since its beginning in the fall of 2018, the brand
has gained traction locally. The increasing demand for high quality
hemp-derived products has led Neptune to recently rebrand Forest
Remedies™ to appeal to a wider audience. Forest
Remedies™ offers finished products such as tinctures, balms,
massage oils, soft gels, and pet soothers. Additional products are
currently in development. Forest Remedies™ products will
continue to be available online (www.forestremedies.com) and could
enter mass market retailers in calendar 2020. With innovation and a
focus on quality, Neptune is confident in its ability to
successfully grow the Forest Remedies™ brand. The company will
deploy a marketing campaign and will be launching a new online
platform in early calendar 2020.
Research and Development Initiatives
Neptune is undergoing and/or planning 10 research and clinical
studies to further elucidate the benefits of its MaxSimil omega-3
licensed technology. Among the several initiatives underway is a
clinical study that is a follow-up on a successful nonclinical
study to determine if MaxSimil fish oil, when used as a carrier
oil, can increase the absorption of cannabinoids in humans. In
another study Neptune will try to establish if our proprietary
formulation of MaxSimil fish oil and CBD can help with occasional
anxiety from everyday life events. We also have an upcoming
clinical study which will look at the use of our proprietary
formulation of MaxSimil fish oil and CBD for workout recovery to
determine if athletes will benefit from its use. This builds on the
findings of our mitochondrial activity and inflammation resolution
studies. We have increased our clinical activity because of the
benefits we see in combining our omega-3 formulations with
cannabinoids and have increased the size of our R&D team
accordingly.
Outlook
"We continue to see strong demand for extraction services in
Canada. We have provided
extraction services to five clients in Canada and expect to continue to diversify our
client base in the coming months. While the ramp-up of our phase II
ethanol extraction is slower than originally anticipated, once
running at full capacity by the end of December, this custom-built
specialized equipment should provide Neptune with low operational
costs," said Stephen Lijoi, VP
Operations at Neptune.
The construction of our Phase IIIa is ongoing and is being
adapted to our customers' needs and changes in the Canadian Federal
and Provincial regulatory requirements for Cannabis 2.0. This
process is expected to be completed before fiscal year-end, subject
to Health Canada approval. The expansion of our packaging
capabilities is tracking as planned along with the installation of
security measures for our warehouse to comply with Health Canada's
requirements. We expect to send a license amendment to Health
Canada for the certification of those areas early in calendar
2020.
The next few months will be very active at Neptune. We have
several projects ongoing in Canada
such as obtaining our organic certification, applying for our sales
license and further down the road, seeking our EU GMP
certification. These future catalysts should help the company
accelerate its revenue growth in Canada.
Our U.S. operations are scaling up as planned and our facility
in North Carolina should reach a
processing capacity of 1,500,000 kg of biomass annually by the end
of December, as expected. The recent changes implemented by the
USDA are expected to increase the cultivation of hemp in the US and
could translate into increased demand for biomass extraction in the
coming years. The recent client wins are an endorsement of our
ability to provide superior extraction services. Our talent pool
continues to grow with the addition of key personnel such as a VP
Sales – U.S. Region and a Head – Quality Assurance both of which
should help support additional growth.
_______________________
|
1 See
"Caution Regarding Non-IFRS Financial Measures" and "Reconciliation
of Segment income (loss) from operating activities before corporate
expenses to Adjusted Segment EBITDA and net loss to Adjusted
EBITDA" which follow.
|
About Neptune Wellness Solutions Inc.
Neptune Wellness
Solutions specializes in the extraction, purification and
formulation of health and wellness products. The Company has in
excess of 100 customers across several verticals including
nutraceutical, cannabis and CPG. Neptune's wholly owned subsidiary,
9354-7537 Québec Inc., is licensed by Health Canada to process
cannabis at its 50,000-square-foot facility located in Sherbrooke, Quebec. The Company also has a
24,000 square-foot facility located in North Carolina to process hemp biomass into
extracts. Neptune brings decades of experience in the natural
products sector to the legal cannabis and hemp industries.
Leveraging its scientific and technological expertise, the Company
sees applications for hemp-derived extracts in the U.S. beyond
existing markets and product forms and into personal care
and home care markets. Neptune's activities also include
the development and commercialization of turnkey nutrition
solutions and patented ingredients such as MaxSimil®, and a variety
of marine and seed oils. Its head office is located in Laval, Quebec.
Caution Regarding Non-IFRS Financial
Measures
The Corporation uses two adjusted financial
measures, Adjusted Segment Earnings Before Interest, Taxes,
Depreciation and Amortization (Adjusted Segment EBITDA) and
Adjusted Earnings Before Interest, Taxes, Depreciation and
Amortization (Adjusted EBITDA) to assess its operating performance.
These non-IFRS financial measures are directly derived from the
Corporation's financial statements and are presented in a
consistent manner. The Corporation uses these measures for the
purposes of evaluating its historical and prospective financial
performance, as well as its performance relative to competitors.
These measures also help 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 Segment EBITDA and Adjusted EBITDA 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's financial condition and operating results.
Neptune's method for calculating Adjusted Segment EBITDA and
Adjusted EBITDA may differ from that used by other
corporations.
Neptune obtains its Adjusted Segment EBITDA measurement by
adding depreciation and amortization and stock-based compensation
to segment income (loss) from operating activities before corporate
expenses. Neptune obtains its Adjusted EBITDA measurement by adding
to net income (loss), net finance costs and depreciation and
amortization and by subtracting income tax recovery. Other items
such as stock-based compensation, litigation provisions,
acquisition costs and severance and related costs that do not
impact core operating performance of the Corporation are also added
back as they may vary significantly from one period to another.
Adjusting for these items does not imply they are
non-recurring.
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," "projects," "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.
Forward-looking information in this press release includes, but is
not limited to, information or statements about our ability to
successfully develop, produce, supply, promote or generate any
revenue from the sale of any cannabis-based and hemp-based products
in the legal market.
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 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".
Neither NASDAQ nor the Toronto Stock Exchange accepts
responsibility for the adequacy or accuracy of this
release.
Conference Call Details
Neptune will be holding a
conference call on November 11, 2019,
at 8:30 AM (EST) to discuss its
second quarter results ended September 30,
2019.
Date:
|
Monday, November 11,
2019
|
|
|
Time:
|
8:30 AM Eastern
Standard Time
|
|
|
Call:
|
1-888-231-8191
(Canada and U.S.)
|
|
1-647-427-7450
(International)
|
|
|
Conference
ID:
|
8390812
|
|
|
Webcast:
|
A live webcast and
presentation of the results can be accessed at:
https://neptunecorp.com/investors/events
|
A replay of the call will be available for replay shortly after
the call's completion, until December 11,
2019. The replay can be accessed online in the Investors
section of Neptune's website under Investor Events and
Presentations. It is also under this section that you will find the
archive of the webcast, along with its accompanying
presentation.
Reconciliation of
Segment income (loss) from operating activities before corporate
expenses to Adjusted
Segment EBITDA1 and net loss to Adjusted
EBITDA1
|
(Expressed in
thousands of dollars)
|
|
Three-month period
ended September 30, 2019
|
|
Nutraceutical
|
Cannabis
|
Corporate
|
Total
|
|
$
|
$
|
$
|
$
|
Total
revenues
|
5,149
|
1,220
|
143
|
6,512
|
Gross
profit
|
1,596
|
(1,730)
|
143
|
9
|
|
|
|
|
|
R&D expenses, net
of tax credits and grants
|
(75)
|
(466)
|
|
(541)
|
SG&A
expenses
|
(1,131)
|
(1,727)
|
|
(2,858)
|
Segment income (loss)
from operating activities before corporate expenses
|
390
|
(3,923)
|
143
|
(3,390)
|
|
|
|
|
|
Unallocated
costs:
|
|
|
|
|
Corporate general and
administrative expenses
|
|
|
(13,924)
|
(13,924)
|
Net finance
costs
|
|
|
(3,488)
|
(3,488)
|
Income tax
recovery
|
|
|
27
|
27
|
Net loss
|
|
|
|
(20,775)
|
|
|
|
|
|
Adjusted Segment
EBITDA1 reconciliation
|
|
|
|
|
Segment income (loss)
from operating activities before corporate expenses
|
390
|
(3,923)
|
|
|
Add:
|
|
|
|
|
Depreciation and
amortization
|
169
|
1,842
|
|
|
Stock-based
compensation
|
125
|
341
|
|
|
Adjusted Segment
EBITDA1
|
684
|
(1,740)
|
|
|
|
|
|
|
|
Adjusted
EBITDA1 reconciliation
|
|
|
|
|
Net loss
|
|
|
|
(20,775)
|
Add
(deduct):
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
2,133
|
Net finance
costs
|
|
|
|
3,488
|
Stock-based
compensation
|
|
|
|
7,879
|
Litigation
provisions
|
|
|
|
79
|
Acquisition
costs
|
|
|
|
1,792
|
Severance and related
costs
|
|
|
|
850
|
Income tax
recovery
|
|
|
|
(27)
|
Adjusted
EBITDA1
|
|
|
|
(4,581)
|
_______________________
|
1 The
Adjusted Segment EBITDA and the Adjusted EBITDA are not standard
measures endorsed by IFRS requirements.
|
Reconciliation of
Segment income (loss) from operating activities before corporate
expenses to Adjusted
Segment EBITDA1 and net loss to Adjusted
EBITDA1
|
(Expressed in
thousands of dollars)
|
|
Three-month period
ended September 30, 2018
|
|
Nutraceutical
|
Cannabis
|
Corporate
|
Total
|
|
$
|
$
|
$
|
$
|
Total
revenues
|
7,071
|
-
|
|
7,071
|
Gross
profit
|
2,357
|
-
|
|
2,357
|
|
|
|
|
|
R&D expenses, net
of tax credits and grants
|
(99)
|
(1,590)
|
|
(1,689)
|
SG&A
expenses
|
(1,095)
|
(479)
|
|
(1,574)
|
Segment income (loss)
from operating activities before corporate expenses
|
1,163
|
(2,069)
|
|
(906)
|
|
|
|
|
|
Unallocated
costs:
|
|
|
|
|
Corporate general and
administrative expenses
|
|
|
(1,915)
|
(1,915)
|
Net finance
costs
|
|
|
(54)
|
(54)
|
Income tax
expense
|
|
|
(175)
|
(175)
|
Net loss
|
|
|
|
(3,050)
|
|
|
|
|
|
Adjusted Segment
EBITDA1 reconciliation
|
|
|
|
|
Segment income (loss)
from operating activities before corporate expenses
|
1,163
|
(2,069)
|
|
|
Add:
|
|
|
|
|
Depreciation and
amortization
|
188
|
495
|
|
|
Stock-based
compensation
|
114
|
256
|
|
|
Adjusted Segment
EBITDA1
|
1,465
|
(1,318)
|
|
|
|
|
|
|
|
Adjusted
EBITDA1 reconciliation
|
|
|
|
|
Net loss
|
|
|
|
(3,050)
|
Add
(deduct):
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
734
|
Net finance
costs
|
|
|
|
54
|
Stock-based
compensation
|
|
|
|
859
|
Income tax
expense
|
|
|
|
175
|
Adjusted
EBITDA1
|
|
|
|
(1,228)
|
_______________________
|
1 The
Adjusted Segment EBITDA and the Adjusted EBITDA are not standard
measures endorsed by IFRS requirements.
|
Reconciliation of
Segment income (loss) from operating activities before corporate
expenses to Adjusted
Segment EBITDA1 and net loss to Adjusted
EBITDA1
|
(Expressed in
thousands of dollars)
|
|
Six-month period
ended September 30, 2019
|
|
Nutraceutical
|
Cannabis
|
Corporate
|
Total
|
|
$
|
$
|
$
|
$
|
Total
revenues
|
9,442
|
1,259
|
172
|
10,873
|
Gross
profit
|
2,946
|
(3,822)
|
172
|
(704)
|
|
|
|
|
|
R&D expenses, net
of tax credits and grants
|
(168)
|
(715)
|
|
(883)
|
SG&A
expenses
|
(2,143)
|
(2,076)
|
|
(4,219)
|
Segment income (loss)
from operating activities before corporate expenses
|
635
|
(6,613)
|
172
|
(5,806)
|
|
|
|
|
|
Unallocated
costs:
|
|
|
|
|
Corporate general and
administrative expenses
|
|
|
(17,892)
|
(17,892)
|
Net finance
costs
|
|
|
(3,607)
|
(3,607)
|
Income tax
recovery
|
|
|
78
|
78
|
Net loss
|
|
|
|
(27,227)
|
|
|
|
|
|
Adjusted Segment
EBITDA1 reconciliation
|
|
|
|
|
Segment income (loss)
from operating activities before corporate expenses
|
635
|
(6,613)
|
|
|
Add:
|
|
|
|
|
Depreciation and
amortization
|
336
|
2,636
|
|
|
Stock-based
compensation
|
242
|
614
|
|
|
Adjusted Segment
EBITDA1
|
1,213
|
(3,363)
|
|
|
|
|
|
|
|
Adjusted
EBITDA1 reconciliation
|
|
|
|
|
Net loss
|
|
|
|
(27,227)
|
Add
(deduct):
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
3,216
|
Net finance
costs
|
|
|
|
3,607
|
Stock-based
compensation
|
|
|
|
8,736
|
Litigation
provisions
|
|
|
|
160
|
Acquisition
costs
|
|
|
|
2,159
|
Severance and related
costs
|
|
|
|
1,263
|
Income tax
recovery
|
|
|
|
(78)
|
Adjusted
EBITDA1
|
|
|
|
(8,164)
|
|
|
|
|
|
Total
assets
|
21,975
|
198,642
|
33,265
|
253,882
|
Cash, cash
equivalents and short-term investment
|
492
|
245
|
23,662
|
24,399
|
Working
capital2
|
6,334
|
(21,894)
|
19,177
|
3,617
|
_______________________
|
1 The
Adjusted Segment EBITDA and the Adjusted EBITDA are not standard
measures endorsed by IFRS requirements.
|
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.
|
Reconciliation of
Segment income (loss) from operating activities before corporate
expenses to Adjusted
Segment EBITDA1 and net loss to Adjusted
EBITDA1
|
(Expressed in
thousands of dollars)
|
|
Six-month period
ended September 30, 2018
|
|
Nutraceutical
|
Cannabis
|
Corporate
|
Total
|
|
$
|
$
|
$
|
$
|
Total
revenues
|
12,240
|
–
|
|
12,240
|
Gross
profit
|
3,851
|
–
|
|
3,851
|
|
|
|
|
|
R&D expenses, net
of tax credits and grants
|
(186)
|
(3,179)
|
|
(3,365)
|
SG&A
expenses
|
(2,183)
|
(976)
|
|
(3,159)
|
Segment income (loss)
from operating activities before corporate expenses
|
1,482
|
(4,155)
|
|
(2,673)
|
|
|
|
|
|
Unallocated
costs:
|
|
|
|
|
Corporate general and
administrative expenses
|
|
|
(4,183)
|
(4,183)
|
Net finance
costs
|
|
|
(202)
|
(202)
|
Income tax
expense
|
|
|
(92)
|
(92)
|
Net loss
|
|
|
|
(7,150)
|
|
|
|
|
|
Adjusted Segment
EBITDA1 reconciliation
|
|
|
|
|
Segment income (loss)
from operating activities before corporate expenses
|
1,482
|
(4,155)
|
|
|
Add:
|
|
|
|
|
Depreciation and
amortization
|
374
|
1,011
|
|
|
Stock-based
compensation
|
244
|
524
|
|
|
Adjusted Segment
EBITDA1
|
2,100
|
(2,620)
|
|
|
|
|
|
|
|
Adjusted
EBITDA1 reconciliation
|
|
|
|
|
Net loss
|
|
|
|
(7,150)
|
Add
(deduct):
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
1,488
|
Net finance
costs
|
|
|
|
202
|
Stock-based
compensation
|
|
|
|
1,884
|
Income tax
expense
|
|
|
|
92
|
Adjusted
EBITDA1
|
|
|
|
(3,484)
|
|
|
|
|
|
Total
assets
|
24,206
|
45,797
|
28,338
|
98,341
|
Cash, cash
equivalents and short-term investments
|
2,394
|
–
|
18,070
|
20,464
|
Working
capital2
|
3,172
|
(1,093)
|
17,126
|
19,205
|
_______________________
|
1 The
Adjusted Segment EBITDA and the Adjusted EBITDA are not standard
measures endorsed by IFRS requirements.
|
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 Wellness Solutions Inc.