Neptune has announced its consolidated financial results for the fourth quarter and fiscal year ended February 28, 2014.
"We are at the verge of a new beginning for Neptune, with our Sherbrooke plant expected to open in early June," said Andre Godin, CFO of Neptune. "We have a high-tech facility and strong management expertise – which will improve service, encourage innovation and heighten performance – all for the greater good of our employees, customers, and shareholders. On top of this, we have successfully resolved all outstanding litigation issues related to the U.S. International Trade Commission's (ITC) investigation into infringement of Neptune's composition of matter patents. We will now focus on strong execution as we reaffirm our role as a premier krill oil manufacturer in the fast growing omega-3 nutraceutical market."
Nutraceutical revenues were $3,465,000 for the three-month period ended February 28, 2014, compared to $4,580,000 for the three-month period ended February 28, 2013. Gross profit as a percent of revenue was 20% for the current quarter, versus 5% for the corresponding prior year quarter. Adjusted EBITDA was negative ($1,456,000) for the current quarter, versus negative ($3,215,000) in the prior year. Net profit was $1,308,000 for the current quarter, compared to net profit of $854,000 in the prior year.
Consolidated revenues totalled $3,665,000 for the three-month period ended February 28, 2014, down from $4,588,000 for the quarter ended February 28, 2013. Adjusted EBITDA was negative ($2,711,000) for the current quarter, versus negative ($4,644,000) in the prior year. Net loss was ($1,327,000) for the current quarter, versus a net loss of ($1,147,000) in the prior year.
Neptune's gross profit margin as a percentage of revenues stood at 20% for the quarter ended February 28, 2014, up from 5% in the corresponding prior year quarter and 13% for the fiscal year ended February 28, 2014. The increase is primarily due to product cost reductions following Neptune's krill oil manufacturing and supply agreement with Rimfrost.
The year-over-year improvement in adjusted EBITDA on both a nutraceutical and consolidated basis is largely due to other income of $5.5 million recorded for royalty settlements with certain third parties up until the end of the fiscal year ending February 28, 2014, to resolve cases related to infringement of the corporation's intellectual property, partially offset by an increase in legal fees and a bad debt expense related to one significant customer.
Nutraceutical revenues totalled $18,995,000, for the fiscal year ended February 28, 2014, compared to $25,263,000 for the corresponding year ended February 28, 2013. Adjusted EBITDA was negative ($12,858,000) for the fiscal year, versus negative ($1,066,000) in the prior year Net loss totalled ($10,737,000) for the fiscal year, compared to a net loss of ($12,779,000) in the prior year.
Consolidated revenues were $19,496,000 for the fiscal year ended February 28, 2014, versus $25,946,000 for the year ended February 28, 2013. Adjusted EBITDA was negative ($19,111,000) for the fiscal year, compared to negative ($5,946,000) in the prior year. Net loss was ($22,237,000) for the current year, versus a net loss of ($19,962,000) in the prior year.
The year-over-year decline in adjusted EBITDA, on both a nutraceutical and consolidated basis, is largely explained by lower gross margins resulting from the plant incident, higher legal fees due to intense negotiations with third parties to successfully settle intellectual property cases and a bad debt expense related to one significant customer. This was partially offset by other income of $5.5 million recorded for royalty settlements as a result of negotiations with third parties to resolve infringement of Neptune's intellectual property.
