Neptune Says IFRS Behind Earnings Decline

LAVAL, QuébecNeptune Technologies & Bioressources Inc. reported financial declines in the three-month period ended May 31, 201, but noted this quarter is the first time the company reported under the International Financial Reporting Standards (IFRS), which had a negative impact.

In his consolidated three-month results, Neptune said revenue increased by 3.1 percent to $4,292,000, up from $4,162,000 achieved during the corresponding period ended May 31, 2010. Consolidated EBITDA amounted to a negative $168,000, compared to 664,000 obtained during the corresponding period ended May 31, 2010. Net earnings decreased by $1,753,000 for a net loss of $1,259,000 or $0.028 per share, compared to a net income of $494,000 or $0.01 per share, for the corresponding period ended May 31, 2010.

Its nutraceutical revenue increased by 3.2 percent to $4,283,000, for the three-month period ended May 31, 2011, up from $4,145,000 achieved during the corresponding period ended May 31, 2010. However, its EBITDA from nutraceutical business was $774,000, compared to $1,084,000 obtained during the corresponding period ended February 29, 2010; and earnings from nutraceutical business decreased by $956,000 and reached a net loss of 70,000, compared to a net income of $886,000, for the corresponding period ended May 31, 2010. 

''This increase in the Company's revenue is mainly attributable to the aggressive penetration of the American, European and Asian/Australian markets due to the increasing awareness and recognition of NKO® and EKO," stated André Godin, chief financial officer. Despite the increase competitiveness in the market especially in the pricing and the devaluation of the U.S. currency, the company has managed to maintain growth in its revenues and usual gross margin levels. ''

 Frédéric Harland, director of finance, added, The deficit in the three-month period ended May 31,2011 was mainly due to an important decrease in the average USD/CND exchange rate during  the three-month period ended May 31, 2011, as well as the IFRS adjustments made to stock-based compensation-and to the selling price reduction due to increase competition."

 In other news, Neptune reappointed the Howard Group as its investor relation firm to develop and implement a capital markets program for Canada.  The agreement and the options granted are subject to the board of directors and TSX-Venture approvals.  The appointment covers traditional and new online initiatives.

The term of the IR Agreement is for a period of 12 months. In addition to a fee of $4,000 per month, the Howard Group has been granted options to purchase an aggregate total of 50,000 common shares of Neptune at a price of $4.00 per share.  The options will vest in equal amounts at the rate of 16.67 percent per quarter and have a three-year term expiring on August 10, 2014.

 In addition, the Howard Group will provide services to Neptune's subsidiary, Acasti Pharma Inc. for a f 12 months. In addition to a fee of $4,000 per month, the Howard Group has been granted options to purchase an aggregate total of 100,000 common shares of Acasti at a price of $1.80 per share.  The options will vest in equal amounts at the rate of 16.67 percent per quarter and have a three-year term expiring on Aug. 10, 2014.