Neptune Reports Fourth Quarter and Fiscal 2021 Results

6.6 min readPublished On: July 18th, 2021By

LAVAL, QC– Neptune Wellness Solutions Inc. (NASDAQ: NEPT) (TSX: NEPT), a health and wellness company focused on plant-based brands, today announced its financial and operating results for the three-month and twelve-month periods ending March 31, 2021.

Fourth Quarter and Full Year Financial Highlights

  • Reported fourth quarter revenue of $6.8 million compared to $9.5 million in the comparable period in fiscal 2020 and was a 127% acceleration versus the third quarter 2021 reported revenue of $3.3 million. Reported fiscal year 2021 revenue of $46.8 million, which increased 58% versus the full fiscal year 2020 of $46.8 million.
  • Reported fourth quarter gross profit loss of $24.8 million compared to a reported gross profit loss of $1.1 million in the comparable period in fiscal 2020 and reported fiscal year 2021 gross profit loss of $36.2 million compared to a gross profit loss of $1.8 million for the fiscal year 2020.
  • Reported fourth quarter net loss of $60.3 million compared to a reported net loss of $39.2 million in the comparable period in fiscal 2020 and reported fiscal year 2021 net loss of $168.6 million compared to a net loss of $60.9 million for the fiscal year 2020.
  • Adjusted EBITDA loss for the fourth quarter was $38.2 million compared to an Adjusted EBITDA loss of $5.8 million in the comparable period in fiscal 2020. Adjusted EBITDA loss for fiscal year 2021 was $52.7 million compared to an Adjusted EBITDA loss of $19.9 million for the fiscal year 2020.

“Fiscal 2021 was the most challenging year in Neptune’s history due to the global pandemic and our transformation into a diversified, health and wellness CPG company,” said Michael Cammarata, President and Chief Executive Officer of Neptune Wellness. “As indicated in our first quarter revenue range of $10 to $12 million, we are now positioned to accelerate top-line growth and leverage costs. Neptune will continue driving organic brand growth through increased distribution and innovation, complimented by strategic, accretive acquisitions, which should lead to improved margins, and ultimately outsized shareholder returns longer-term.”

Fourth Quarter Business Highlights

  • Entered an agreement with Société québécoise du cannabis (“SQDC”), Quebec’s sole legal retailer for recreational cannabis, for the sale of recreational cannabis products, which will be sold under the PanHash brand.
  • Received amended license by Health Canada to sell dried cannabis flower and pre-rolled cannabis in Canada.
  • Developed and licensed CoQ10-enhanced and CBD-enhanced fish oil supplements using our MaxSimil technology and licensed to existing customers.
  • Acquired majority stake in Sprout Food, an organic baby and toddler snack food company. Sprout is currently the #5 organic baby food brand in the U.S. and #3 on Amazon.
  • Raised gross proceeds of US$55 million in an equity offering to a syndicate of institutional investors.

Subsequent Events and Business Updates

  • Entered a supply agreement with Alberta Gaming, Liquor and Cannabis (“AGLC”), the wholesaler and sole online retailer for recreational cannabis in Alberta. Combined with other provincial supplier agreements, Neptune can now sell recreational cannabis products, under its Mood Ring and PanHash brands, to nearly 1,900 licensed retail locations across Alberta, British Columbia, Ontario, and Quebec.
  • Launched High-CBD capsules and oil under the PanHash brand in Quebec.
  • Launched three new Mood Ring SKU’s, including dried flower in the province of British Columbia. Mood Ring Florida Citrus Kush is Neptune’s first branded flower product.
  • Began selling Sprout organic baby foods into substantially all Target stores in the U.S. and, significantly increasing the brand’s distribution.
  • Announced a multi-year licensing agreement between Sprout and CoComelon. With more than 110 million YouTube subscribers, CoComelon is the #1 children’s entertainment and educational show in the world.
  • Given the first quarter of fiscal 2022 has ended, management announced it expects revenue for the fiscal quarter ended June 30th to be within a range of $10 to $12 million. If achieved, this would represent a sequential growth rate of about 47% to 76% versus the fourth quarter reported revenue of $6.8 million.

Disclaimer – Safe Harbour Forward–Looking Statements

Forward-looking statements contained in this press release involve known and unknown risks, uncertainties and other factors that may cause actual results, performance and achievements of Neptune Wellness Solutions to be materially different from any future results, performance or achievements expressed or implied by the said forward-looking statements.

Neither NASDAQ nor the Toronto Stock Exchange accepts responsibility for the adequacy or accuracy of this release.


Consolidated Statements of Financial Position

As at March 31, 2021 and 2020

March 31,March 31,
Current assets:
Cash and cash equivalents$75,167,100$16,577,076
Short-term investment24,05036,000
Trade and other receivables10,887,74810,793,571
Prepaid expenses4,631,4222,296,003
Property, plant and equipment46,913,68860,028,574
Right-of-use assets3,541,1471,386,254
Intangible assets32,606,96925,518,287
Tax credits recoverable184,470
Other assets7,243,774530,000
Total assets$234,744,571$168,775,947
Liabilities and Equity
Current liabilities:
Trade and other payables$24,975,764$12,451,669
Lease liabilities288,947450,125
Loans and borrowings3,180,927
Deferred revenues2,499,37617,601
Lease liabilities3,626,5741,141,314
Long-term payables555,440
Deferred tax liabilities5,015,106
Liability related to warrants9,879,980
Loans and borrowings14,211,339
Other liability2,258,4491,217,769
Total liabilities60,561,42425,145,654
Share capital379,643,670213,876,454
Contributed surplus71,991,32869,173,313
Accumulated other comprehensive income1,202,4095,517,376
Total equity attributable to equity holders of the Corporation146,103,143143,630,293
Non-controlling interest28,080,004
Total equity attributable to non-controlling interest28,080,004
Total equity174,183,147143,630,293
Commitments and contingencies
Total liabilities and equity$234,744,571$168,775,947


Consolidated Statements of Loss and Comprehensive Loss

For the years ended March 31, 2021 and 2020

March 31,


March 31,


Revenue from sales and services$45,304,176$27,722,571
Royalty revenues1,467,3271,630,717
Other revenues38,339224,516
Total revenues46,809,84229,577,804
Cost of sales(83,005,929)(31,416,251)
Gross profit(36,196,087)(1,838,447)
Research and development expenses, net of tax credits and grants of $16,227 (2020 – $73,930)(2,155,332)(2,870,497)
Selling, general and administrative expenses(88,196,284)(64,664,389)
Impairment loss related to property, plant and equipment(14,211,673)
Impairment loss related to right-of-use assets(142,345)
Impairment loss related to goodwill(35,567,246)(85,548,266)
Loss from operating activities(176,468,967)(154,921,599)
Finance income1,091,882151,219
Finance costs(2,471,281)(583,707)
Foreign exchange gain (loss)(5,344,763)1,883,999
Revaluation of derivatives10,000,929
Change in fair value of contingent consideration97,208,166
Loss before income taxes(173,192,200)(56,261,922)
Income tax recovery (expense)4,598,577(4,601,340)
Net loss(168,593,623)(60,863,262)
Other comprehensive income
Unrealized gains on investments192,2791,320,431
Net change in unrealized foreign currency losses on translation of net investments in foreign operations(4,805,991)3,438,879
Total other comprehensive income (loss)(4,613,712)4,759,310
Total comprehensive loss$(173,207,335)$(56,103,952)
Net loss attributable to:
Equity holders of the Corporation$(167,146,749)$(60,863,262)
Non-controlling interest(1,446,874)
Net loss$(168,593,623)$(60,863,262)
Total comprehensive loss attributable to:
Equity holders of the Corporation$(171,461,716)$(56,103,952)
Non-controlling interest(1,745,619)
Total comprehensive loss$(173,207,335)$(56,103,952)
Basic and diluted loss per share attributable to the equity holders of the Corporation$(1.38)$(0.68)
Basic and diluted weighted average number of common shares121,277,03389,972,395


Although the concept of Adjusted EBITDA is not a financial or accounting measure defined under IFRS and it may not be comparable to other issuers, it is widely used by companies. Neptune obtains its Adjusted EBITDA measurement by adding to net loss, net finance costs and depreciation and amortization, and by subtracting income tax recovery. Other items such as stock-based compensation, non-employee compensation related to warrants, litigation provisions, acquisition costs, signing bonuses, severances and related costs, impairment losses, write-downs, revaluations, and changes in fair values 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.

Adjusted EBITDA1 reconciliation, in thousands of dollars

Three-month periods endedTwelve-month periods ended
March 31,March 31,March 31,March 31,
Net income (loss) for the period$(60,328)$(39,239)$(168,594)$(60,863)
Add (deduct):
Depreciation and amortization3,3602,61211,7258,384
Acceleration of amortization of long-lived non-financial assets13,953
Revaluation of derivatives(4,635)(10,001)
Net finance costs(11,752)(1,545)6,724(1,452)
Stock-based compensation3,3403,35613,06916,595
Non-employee compensation related to warrants23817,5445,34918,598
Acquisition costs3963962,211
Signing bonuses, severances and related costs6011,263
Cybersecurity incident1,983
Write-down of inventories and deposits17,6832,08225,0742,082
Impairment loss on long-lived assets12,21341,45249,92185,548
Change in fair value of contingent consideration(36,782)(97,208)
Income tax expense (recovery)914,675(4,599)4,601
Adjusted EBITDA1$(38,249)$(5,783)$(52,694)$(19,948)

Please note that non-employee compensation related to warrants and signing bonuses are new additions to the Company’s calculation methodology since the quarter ended September 30, 2020.  Signing bonuses did not occur previously, so no restatement of the previous periods was needed, but there were non-employee compensation expenses related to warrants in previous quarters; consequently, the amounts for the years ended March 31, 2021 and 2020 reflect the sum of those expenses for all quarters of respective fiscal years. Please also note that the change in fair value of the contingent consideration and the write-down of inventories and deposits were also added to the calculation of the adjusted EBITDA for the comparative periods.

1.The Adjusted EBITDA is not a standard measure endorsed by IFRS requirements.

(This information is primarily sourced from Neptune.  Highly Capitalized has neither approved nor disapproved the contents of this news release. Read our Disclaimer here).

About the Author: News Team

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