Neptune Wellness Solutions (TSX: NEPT) (NASDAQ: NEPT) reported its second quarter fiscal 2020 results this morning, posting revenues of $6.5 million, a 49% increase on a quarter over quarter basis. The firm however is slow in showing overall growth, with year over year revenues down 8% for the same quarter. Neptune posted a loss of $20.8 million during the quarter.
Revenues from cannabis remain a low percentage of Neptune’s overall revenue, with the segment obtaining revenues of $1.22 million during the quarter, or 18.7% of overall revenues. This however was up on a quarter over quarter basis, with the first quarter of 2020 seeing only $38,000 in cannabis segment revenue. It should be noted however that the gross profit for Neptune’s cannabis segment came in at ($1.73 million).
Neptunes cash position increased from $5.33 million to $24.36 million over the quarter, a significant increase as a result of a private placement conducted during the quarter of $53.97 million. Trade receivables also grew during the quarter, rising from $5.70 million to $6.78 million, representing 104.13% of revenues generated during the quarter. Inventories also rose, from $6.41 million to that of $9.04 million.
The big balance sheet story however is the significant increase seen in goodwill, with last quarters $6.75 million figure ballooning to $122.50 million. The massive increase is the result of the acquisition of SugarLeaf. While Sugarleaf had an initial price tag of $23.74 million, a massive contingent consideration due to performance targets and earnout payments of $173.47 million has resulted in a goodwill bump of $115.75 million.
Expenses during the quarter game in at $16.78 million, more than double total revenues earned during the period. Little color was provided by Neptune on what the expense breakdown consisted of, however stock based compensation amounted to $7.41 million during the quarter and is included in that figure. Stock based compensation amounted to 120.99% of total revenues during the quarter.
Neptune Wellness closed Friday’s session at $4.72 million on the TSX.
Information for this analysis was found via Sedar and Neptune Wellness Solutions. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.
