Neptune Wellness Solutions Inc. (NASDAQ: NEPT) (TSX: NEPT) reported revenue increased 155% sequentially to $28 million for the second quarter ending September 30, 2020. Revenues in the first quarter were restated to $11.2 million. It was a big jump over last year’s total revenues of $6 million for the 2019 second quarter. The stock was jumping over 15% in after hours trading to sell near $2.18.
The company delivered a net loss $21 million slightly more than last year’s net loss of $20 million. All figures are canadian dollars unless otherwise stated.
“I am pleased with our strong top line growth and the successful strategic investments we made during the second quarter of fiscal 2021,” said Michael Cammarata, Chief Executive Officer of Neptune. “We are on track for our CPG products to exceed 70% of our revenues in the third quarter of fiscal 2021 and expect this segment of our business to continue to generate very strong growth. The investments and operating efficiencies we implemented in the first and second quarters of fiscal 2021 and will continue to make in the third quarter of 2021, have us well positioned to begin realizing the tremendous revenue from our purchase orders to come. These orders combined with the growth of our other areas will drive profitable accretive growth with limited incremental capital investment, ultimately driving higher margins and higher returns.”
On a positive note, Neptune said it has received over US$100 million in purchase orders for its Biodroga and Innovations divisions. The purchase orders come from six different Neptune clients and the booked sales of about $100 million are scheduled to ship in the next 2 quarters. A company spokesman said, “We remain committed to increasing shareholder value as well as confidence and these Purchase Orders are evidence that our B2B and B2C dual go-to-market strategy to serve consumers at both wholesale and retail levels, is yielding consistent, long-term revenue opportunities.” It should be noted, however, that the purchase orders are not guaranteed, and there is no certainty that all of the orders will be completed or that they will be fulfilled in their entirety.
Neptune also announced in a company statement that David Myers, who was previously Chief Operating Officer, recently left the company for personal reasons. Dr. Toni Rinow has been appointed as Global Operating Officer in addition to her current role as Chief Financial Officer, effective immediately. Dr. Rinow has been instrumental in increasing efficiencies and future profitability across Neptune’s business units, reducing its headcount by 25% to focus on forward-thinking initiatives and to accelerate growth with less focus on long-term, asset heavy investments.
Dr. Toni Rinow , Chief Financial Officer and Global Operating Officer of Neptune, added: “During the second quarter we saw continued growth to our top line while we made additional strategic investments in the future of the Company and in our distribution channels. These investments were an important steppingstone into the next phase of growth. Moving into the back half of fiscal 2021 we are sufficiently capitalized and well positioned to deliver on growth in purchase orders in the fourth fiscal quarter of 2021 and as we move into the first half of fiscal 2022. We remain focused on innovation that will continue to help customers, from the time they wake up to when they go to sleep.”
Neptune restated its previously filed condensed consolidated interim financial statementsthe first quarter ending June 30, 2020 with respect to recognition of revenue relating to one transaction that was initially recognized at the gross amount and was restated to present the net amount of the transaction. There is no impact on the net loss in the condensed consolidated interim statement of loss and comprehensive loss resulting form this restatement. The restatement of the June 30, 2020 interim statements includes management’s conclusion that Company’s internal control over financial reporting (“ICFR”) was not effective as at June 30, 2020 , due to the existence of a material weakness in its design and the Company’s plans to remediate such weakness.