Neptune has announced its consolidated financial results for the three and nine-month periods ended November 30, 2013.
Consolidated revenues totalled $4,396,000 for the three-month period, down from $7,027,000 for the quarter ended November 30, 2012. Adjusted EBITDA was negative ($5,912,000) for the current quarter, versus negative ($665,000) for the corresponding prior-year quarter. Net loss was ($10,443,000) for the current quarter, versus a net loss of ($12,437,000) in the corresponding prior-year quarter.
For the nine-month period, consolidated revenues totalled $15,831,000 compared to $21,273,000 for the corresponding prior-year period. Adjusted EBITDA was negative ($15,951,000) versus negative ($1,303,000), while the net loss was ($20,910,000) compared with ($18,815,000) a year ago.
On November 8, 2012, an explosion destroyed Neptune’s sole production plant located in Sherbrooke, Quebec, Canada. While operations are being re-established, revenues to date have largely been generated from the sale of krill oil acquired by the company through short-term temporary arrangements. Neptune has been able to maintain a large portion of its pre-incident revenues through the sale of commodity krill oil and margin concessions.
Neptune will soon be able to offer customers its premium krill oil product, NKO, with production at the Sherbrooke facility expected to resume soon: the rebuild of the Sherbrooke facility is entering its final stages and it is now expected to open around the beginning of the company’s next fiscal year, which starts on March 1, 2014. Upon completion, the plant will have the ability to produce more than 150 metric tons of krill oil annually.
In October 2013, a three year renewable manufacturing and supply agreement was also secured with Rimfrost. This arrangement, says Neptune, significantly strengthens its on-going production capacity and safeguards operations by moving the company from a centralised production model to a more diversified arrangement.
The agreement provides Neptune with an additional 800 metric tons of krill oil over the three-year term.
Going forward, Neptune intends to focus production of its premium krill oil, NKO, at its Sherbrooke plant, while primarily meeting the demand for good quality Eco krill oil, EKO, through the Rimfrost agreement.
“Although the past year has been challenging, we are approaching the end of difficult period for Neptune,” said Henri Harland, president and CEO of Neptune. “Our action plans to restore operations and increase production capacity are moving forward as planned and we continued to successfully defend our intellectual property. The Rimfrost manufacturing and supply agreement, together with the anticipated opening of the Sherbrooke facility, puts us in a strong position to meet future demand expectations as the omega-3 nutraceutical market continues to grow and we extend our reach. As production at our Sherbrooke facility gets underway, we expect margins to strengthen and with the positive settlements in the ITC investigation we expect legal fees to decline in the coming year. Collectively, we are well positioned to emerge stronger than we were prior to the plant incident.”
