Neptune Wellness Archives - Green Market Report

Debra BorchardtDebra BorchardtFebruary 13, 2020
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5min3390

Neptune Wellness Solutions Inc.  (NASDAQ: NEPT) (TSX: NEPT) announced its financial results for its fiscal third-quarter ending December 31, 2019. Total revenues for Neptune were $9.1 million, a sequential increase of $2.6 million or 41% over the second quarter ended September 30, 2019. This was also an increase of $2.6 million or 40% compared to $6,538 for the three-month period ended December 31, 2018.

Revenues from the cannabis segment reached $2.8 million, an increase of $1.5 million sequentially from the three-month period ended September 30, 2019. Neptune started the commercial operations of its Cannabis segment in March 2019 and had no revenues in the prior-year period ended December 31, 2018.

Making Money

Net income was $5.6 million for the quarter versus a net loss of $3.6 million for the same time period in 2019. The transition from net loss to net income is due to a gain of $64.5 million related to a reduction in the fair value of the contingent consideration in connection to the acquisition of SugarLeaf Labs. The company stated that this gain was partly offset by an impairment of goodwill of $44 million related to SugarLeaf.

CEO Michael Cammarata said: “Since I joined the company six months ago, we’ve had to reassess all facets of our business plans. It quickly became apparent that there were several operational challenges that needed to be addressed immediately. Our revenue growth of 41% sequentially is a solid testament to this, considering the current cannabis and hemp environment. While our profitability this quarter was short of our expectations due to the slower than expected ramp-up of our Phase II cold ethanol production process and industry factors beyond our control, we are setting up our long-term success by expanding our channel strategy with an increased focus on end clients, in Canada and the US.”

Revenues from the Nutraceutical segment for the three-month period amounted to $6.3 million, representing an increase of 23% sequentially, over the second quarter ended September 30, 2019, and a slight decrease of $202 or 3% compared to $6.5 million for the three-month period ended December 31, 2018.

Cammarata went on to add, “The US launch today of our Forest Remedies and Ocean Remedies products is a significant step forward in expanding our footprint and brand equity and will be followed by a similar launch in Canada, once approved by health authorities. The Forest Remedies hemp-derived wellness products include ingestibles in soft gel and extract forms, topical balms, massage oils, and a pet soother. We are also launching an essential oil and aromatherapy line that we developed in collaboration with our partner, International Flavors & Fragrances. Despite a slightly slower than anticipated ramp-up on the production side and changes to planned capacity expansion, we are building the foundation for this company for many years to come. I am excited about the future prospects, in particular the launch and significant potential of our consumer brands.”

Canada 2.0

Neptune said it had identified underserved segments of the Cannabis 2.0 products in Canada. “There is currently limited availability of cannabis concentrates on the market and Neptune intends to fill that void by expanding its production capabilities to produce these cannabis derivatives and other niche product forms. Neptune is exploring the potential to diversify its extraction capabilities to include solvent-less and hydrocarbon extraction methods, which are well suited to produce high-quality cannabis concentrates.”

 


StaffStaffNovember 11, 2019
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4min5390

Neptune Wellness

Neptune Wellness Solutions Inc.  (NASDAQ: NEPT) (TSX: NEPT) stock fell over 6% to $3.32 after the company reported a decrease in sales. Neptune reported total revenues for the second quarter ending September 30, 2019, amounted to $6.5 million, representing an increase of 49% over the first quarter but a decrease of 8% versus last year’s $7 million for the same time period. The decrease in revenues was attributed to the timing of orders in the nutrition business.

The company also delivered a net loss of $20 million versus last year’s net loss of $3 million. The company blamed the increase in losses to an increase in stock-based compensation expense, depreciation and amortization and to accretion expense on contingent consideration combined with a lower adjusted EBITDA.

The adjusted EBITDA was a loss of $4.5 million versus a loss of $1.2 million last year. The increased Adjusted EBITDA. 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,” read the company statement.

“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.

Medicine Man

Medicine Man Technologies, Inc. (OTCQX: MDCL) delivered total revenue in the third quarter of $5,338,868, an increase of approximately 14% compared to revenues of $4,672,519 in the quarter ended September 30, 2018. Strong product sales and litigation revenue in the most recent quarter offset a one-time licensing sale in the same quarter of 2018. Unfortunately, Medicine Man reported net losses of $1,827,978 or five cents per share, versus last year’s net income of $4,950,601, or $0.18 per share.

“The third quarter of 2019 was a transformational one for the Company,” said Mr. Andy Williams, Co-Founder and Chief Executive Officer of Medicine Man Technologies. “We reported seven additional proposed acquisitions, bringing our total to 12 pending acquisitions, we filled a key leadership role within the Company and saw positive initiatives in the industry both locally and federally, which strengthened our industry-leading position. In looking at our operations related to the consulting services and our products, the continued positive trends we see in the third quarter are encouraging, as both grew at double-digit percentage growth rates.”

Operating expenses grew to $3,478,232 as compared to $1,842,954 for the same period in 2018. The increase was primarily attributable to non-cash, stock-based compensation and costs associated with activities related to building an infrastructure to ensure seamless integration of the company’s numerous pending acquisitions and to help build the proper platform for sustainable growth.

The company’s cash balance on September 30, 2019, was $15,204,587 as compared to $529,674 on September 30, 2018. The increased cash position was due primarily to the equity investment by strategic partner Dye Capital & Company.

 

 



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