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Neptune revenues, margin rise

21 Jan 2016

Neptune has announced third quarter revenues of CAN$5.5 million, up from $4.7 million, with a rise to 24% of gross margin on sales. Adjusted EBITDA was negative ($2,554,000) for the current quarter, versus negative ($4,315,000) in the prior year

Neptune revenues, margin rise

Neptune has announced third quarter revenues of CAN$5.5 million, up from $4.7 million, with a rise to 24% of gross margin on sales. Adjusted EBITDA was negative ($2,554,000) for the current quarter, versus negative ($4,315,000) in the prior year. Net loss was $2,928,000 for the current quarter, versus net income of $74,000 in the prior year.

"Our business fundamentals continue to improve," said Jim Hamilton, President and CEO of Neptune. "We are especially pleased to see our profitability increase as we leverage cost reduction initiatives and drive on-going margin improvement. This is resulting in a much improved bottom line and strengthening cash flows within the nutraceutical segment. Our recent acquisition of Biodroga, further positions Neptune for success, by adding a new growth vehicle in a significantly larger addressable market. The transaction is expected to be immediately accretive for our shareholders."

The third quarter EBITDA improvement was mainly driven by higher revenues and a stronger gross margin relating to cost reduction initiatives, including plant efficiencies. The lower net loss reflects stronger revenues, a significant gross margin improvement, along with the receipt of insurance recoveries connected with the 2012 plant incident. In comparison, the prior year net loss included plant ramp-up costs.

For the year to date, consolidated revenues totalled $12,602,000 for the nine-month period ended November 30, 2015, compared to $11,049,000 for the corresponding prior-year period. Adjusted EBITDA was negative ($10,826,000) versus negative ($22,962,000) and the net loss was $10,450,000 ($19,143,000).

Project Turbo, a company-wide initiative introduced to drive efficiencies and heighten operating performance, remains on track and is already having a meaningful impact on margins. To date, Neptune has identified and implemented initiatives that will generate 75% of the approximately $5.0 million targeted savings, with around 30% of total savings already being reflected in the results as of November 30, 2015.