Benzinga | Nov 16, 2021 11:39AM EST

Neptune Wellness Reports Third Consecutive Quarter Of QoQ Revenue Growth, Unveils Action Plan

Neptune Wellness Solutions Inc. (NASDAQ:NEPT) (TSX:NEPT) published its financial and operating results late Monday for the three months ended on September 30, revealing that it has generated $15.7 million in the second quarter of fiscal 2022, up by 27% sequentially.

Michael Cammarata, president and CEO of the Laval Quebec-based company, said that Neptune saw the "third consecutive quarter of revenue growth, primarily driven by strong demand for our cannabis flower products, continued expansion of our Sprout brand into North American retailers and record sales for Biodroga."

Q2 2022 Financial Highlights

* Gross profit loss of $1.8 million compared to gross profit loss of $4.7 million, an improvement of $2.9 million from the quarter ended September 30, 2020.

* Negative gross margin of 9.5%, an 880 basis point improvement from a negative gross margin of 18.3% in the prior comparable period.

* Net loss of $14 million compared to $22 million for the quarter ended September 30, 2020, representing an improvement of $8 million.

* Adjusted EBITDA loss improved $3.5 million or 27% to an adjusted EBITDA loss of $9.5 million compared to $13 million for the quarter ended September 30, 2020.

Q2 2022 Business Highlights

* Appointed Randy Weaver as interim CFO and John Wirt as general counsel.

* Launched Mood Ring flower product line in Alberta.

* Launched Sprout products across Metro Inc. grocery stores in Canada and further expanded into new retail chains throughout the region.

"During the quarter, we more than doubled our market penetration for our Canadian cannabis products to over 1,000 stores where we sell our Mood Ring and PanHash brands," Cammarata continued.

Completion Of Strategic Review & New Comprehensive Action Plan

Separately, Neptune Wellness revealed that following the establishment of a strategic review committee in August, the board of directors has approved a comprehensive action plan presented by the company's management team to unlock shareholder value.

The action plan includes short-term and long-term cost-cutting initiatives and the immediate reorganization of Neptune's operations and resources, which are estimated to generate annual cost savings of over $10 million (CA$12.5 million) and streamline operations.

The management implemented and executed the following actions previously approved by the board:

* Resource prioritization on three core product lines and operations, including Sprout Foods, cannabis and Biodroga.

* Elimination of non-core operations.

* Immediate reduction in personnel by approximately 10% to streamline operations, including the role of chief operating officer.

* Temporary freeze on non-essential hiring.

* Continued commitment to building a culture of improved transparency and accountability.

More recent news from Neptune Wellness:

* Neptune Sells New Sustainable Mood Ring Vapes In Canada, Part Of Proceeds Support Planting Trees

* Neptune Wellness Obtains U.S. Patent For Its Original Cannabis Extraction Process Using Organic Solvents

NEPT Price Action

Neptune Wellness' shares traded 0.6432% higher at $0.4851 per share at the time of writing Tuesday morning.

Photo: Courtesy of Nataliya Vaitkevich from Pexels