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.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.