Cannabis Stock News Bites: Neptune (NASDAQ: $NEPT) (TSX: $NEPT.TO) Reports Fiscal 2020 Third Quarter Results Revenues increase 41% sequentially over Q2 results
Laval, Québec, CANADA - February 13, 2020 Investorideas.com (www.investorideas.com) Cannabis Stock News Bites - Neptune Wellness Solutions Inc. (NASDAQ: NEPT) (TSX: NEPT), today announced its financial and operating results for the three month period ended December 31, 2019. All amounts are in thousands of Canadian dollars except if specified otherwise.
Third Quarter Financial and Corporate Highlights:
- Total revenues for the three-month period ended December 31, 2019 amounted to $9,175, representing a sequential increase of $2,663 or 41% over the second quarter ended September 30, 2019 and an increase of $2,637 or 40% compared to $6,538 for the three-month period ended December 31, 2018. Revenues from the Cannabis segment reached $2,811, an increase of $1,591 sequentially from the three-month period ended September 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 December 31, 2018.
- Revenues from the Nutraceutical segment for the three-month period ended December 31, 2019 amounted to $6,336, representing an increase of 23% sequentially, over the second quarter ended September 30, 2019 and a slight decrease of $202 or 3% compared to $6,538 for the three-month period ended December 31, 2018.
- Net income for the three-month period ended December 31, 2019 amounted to $5,603 compared to a net loss of $3,658 for the three-month period ended December 31, 2018. The transition from net loss to net income is due to a gain of $64,509 related to a reduction in the fair value of the contingent consideration in connection to the acquisition of SugarLeaf Labs. This gain was partly offset by an impairment of goodwill of $44,096 related to SugarLeaf. In addition, Neptune incurred an increase in non-cash expenses related to stock-based compensation expense, depreciation and amortization combined with a lower Adjusted EBITDA1 .
- Adjusted EBITDA1 decreased by $5,131 for the three-month period ended December 31, 2019 to ($7,054) compared to the three-month period ended December 31, 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 October 4, 2019, Neptune announced a strategic partnership with American Media LLC ("American Media") where American Media 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. American Media's portfolio of brands has a combined total circulation of over 5.7 million and reach over 53 million readers each month. Under the terms of the agreement, American Media will have the opportunity to become a shareholder in Neptune through the issuance to American Media of 3,000,000 warrants, 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 November 11, 2019 Neptune announced a collaboration agreement with International Flavors & Fragrances Inc. ("IFF") to co-develop hemp-derived CBD products for the mass retail and health & wellness Page 2 of 11 markets. Under this strategic product development partnership, IFF will leverage its intellectual property (IP) for taste, scent and nutrition 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 hempderived products infused with essential oils, for the cosmetics, personal care and home care markets. Under the terms of the agreement, IFF will have the opportunity to become a shareholder of Neptune through the issuance of 2,000,000 warrants, each warrant allowing the holder to purchase one common share of Neptune at an exercise price of US $12.00 per share with a 5-year expiration date.
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