Neptune Wellness Solutions Posts Q1 2024 Financial Results

NEW YORK – Neptune Wellness Solutions Inc. a consumer-packaged goods company emphasizing plant-based and sustainable lifestyle brands, reported its financial and operational results for the quarter ending June 30, 2023.

Key takeaways from the report include:

• Operational Improvements: The company emphasized its commitment to enhancing operations, reducing costs, and improving overall efficiency. Neptune’s efforts have seemingly paid off, with the Sprout organic baby food product line witnessing a notable 26% gross profit margin, which exceeded the company’s projected 22% for 2024.
• Financial Highlights: Neptune’s consolidated net revenue was $10.6 million, a decline from the $16.3 million in the same quarter of the previous year. This decline was attributed to a full stop in cannabis revenue from the now-divested cannabis business and a decrease in nutraceutical revenues, balanced out by rising food and beverage revenues.
• Despite the challenges, the company reported a gross profit of $2.8 million, an improvement from the gross loss of $4.5 million last year. This uplift can be credited to the increase in food and beverage revenue and the divestiture from the cannabis sector.
• Expenses: There was an uptick in consolidated SG&A expenses, registering $10.0 million compared to the previous year’s $9.0 million for the same quarter. This growth in expenses stemmed primarily from rising consulting and accounting fees tied to the 10K filing.
• Business Highlights: Sprout, the company’s organic baby food product, showcased impressive distribution growth, expanding its reach to nearly 32,340 outlets across North America. Furthermore, the company successfully secured inventory financing for Sprout, raising the cap to $7.5 million, up from the initially announced $5 million.

In other corporate moves, Neptune extended the maturity of its $13 million promissory note for Sprout with Morgan Stanley to the end of 2024. The firm also closed a public offering that garnered approximately $4 million.

Neptune made key managerial shifts with the appointment of Lisa Gainsborg, previously the company’s Financial Controller, as the Interim Chief Financial Officer. There was also an initiation of the next phase in the strategic review process.

Moreover, subsequent updates revealed a term agreement with Morgan Stanley, presenting an option to trade Sprout Organics’ debt. Concurrently, an amendment was made to the inventory finance rider, broadening access to total available funds and integrating an over advance rider capped at $600,000.

As Neptune continues its strategic evolution in the market, stakeholders are keen to see how these financial and operational shifts will influence the company’s direction and profitability in the coming quarters.