This Canadian Co. Said Farewell To Cannabis, Stock Surges On Heels Of Q1 Earnings Report

Neptune Wellness Solutions Inc. NEPT announced its first quarter financial results for the three months ending June 30, 2023, revealing a year-over-year drop in consolidated revenue to $10.6 million, from $16.3 million for the same period of last year.

The Laval, Quebec-based company says that's due to a decrease of $2.7 million or 100% in cannabis revenues from the now-divested cannabis business and a decrease of $2.9 million in nutraceutical revenues.

In June, it opted to divest its cannabis assets in order to become "a pure play, purpose-driven consumer packaged goods company," president and CEO Michael Cammarata, who was a guest speaker at Benzinga's event last year, said back then. Benzinga Cannabis Capital Conference returns to Chicago this September.

The plan included selling the Mood Ring and PanHash brands and the company's Sherbrooke, Quebec facility in one or more transactions.

Q1 2024 Financial Highlights

• Gross profit totaled $2.8 million, up from a loss of $4.5 million in the same period last year.
• Loss from operating activities was $7.2 million, down from $14.4 million in the first quarter of fiscal 2023.
• Net loss was $6.4 million, down from $6.5 million in the prior year's quarter.
• Total comprehensive loss amounted to $6.8 million, compared to $9.3 million in the corresponding quarter of last fiscal year.
• Adjusted EBITDA came in negative at $7.3 million, compared to $11.3 million adjusted EBITDA loss in the prior year's period.
• Consolidated SG&A expenses totaled $10 million compared to $9 million in the first quarter of fiscal 2023, an increase of $1 million or 12%.
• Sprout achieved gross margins of 26% in the first quarter, ahead of our previous guidance targeting 22% for fiscal 2024.
• Biodroga reported gross margins of 28%, reflecting effective cost management initiatives.
• As of June 30, the company had $30.5 million in total assets, $1.4 in cash and cash equivalents and $62.6 million in total liabilities.

Neptune Wellness' Sprout Organics, an organic plant-based baby food and toddler snack company, is witnessing increasing demand for microwaveable meals, which seem to be making a comeback.

To that end, Sprout Organics has launched a product line called Mealz which consists of organic' heat and serve' meals for children, expanding the company beyond the Baby Food aisle. 

Price Action

Neptune’s shares traded 97.3894% higher at $0.2722 per share at the time of writing on Friday.

The Benzinga Cannabis Capital Conference, the place where deals get done, is returning to Chicago this Sept 27-28 for its 17th edition. Get your tickets today before prices increase and secure a spot at the epicenter of cannabis investment and branding.

Photo: Courtesy of Josh Appel on Unsplash