Mr. Jim Hamilton reports

NEPTUNE ANNOUNCES THIRD QUARTER RESULTS

Neptune Technologies & Bioressources Inc. has released its its financial and operating results for the third quarter ended Nov. 30, 2015.

"Our business fundamentals continue to improve," stated Jim Hamilton, president and chief executive officer of Neptune. "We are especially pleased to see our profitability increase as we leverage cost-reduction initiatives and drive ongoing margin improvement. This is resulting in a much improved bottom line and strengthening cash flows within the nutraceutical segment. Our recent acquisition of Biodroga further positions Neptune for success by adding a new growth vehicle in a significantly larger addressable market. The transaction is expected to be immediately accretive for our shareholders."

Third-quarter financial results

Nutraceutical business results:

• Nutraceutical revenues were $5,515,000 for the three-month period ended Nov. 30, 2015, versus $4,706,000 in the third quarter ended Nov. 30, 2014.
• Adjusted earnings before interest, taxes, depreciation and amortization (1) was negative ($565,000) for the current quarter, compared with negative ($1,957,000) in the prior year.
• Net loss was $1,317,000 for the current quarter, versus a net loss of $3,241,000 in the prior year.

Consolidated results:

• Consolidated revenues totalled $5.52-million for the three-month period ended Nov. 30, 2015, up from $4,735,000 for the quarter ended Nov. 30, 2014.
• Adjusted EBITDA was negative ($2,554,000) for the current quarter, versus negative ($4,315,000) in the prior year.
• Net loss was $2,928,000 for the current quarter, versus net income of $74,000 in the prior year.

The nutraceutical third-quarter EBITDA improvement was mainly driven by higher revenues and a stronger gross margin relating cost-reduction initiatives, including plant efficiencies. The lower net loss reflects stronger revenues, a significant gross margin improvement, along with the receipt of insurance recoveries connected with the 2012 plant incident. In comparison, the prior-year net loss included plant ramp-up costs.

On a consolidated basis, the current quarter includes adjusted EBITDA of negative $2.0-million and a net loss of $1.6-million for Neptune's subsidiary, Acasti, which is actively engaged in clinical studies, and research and development. In the corresponding prior-year quarter ending Nov. 30, 2014, Acasti recorded negative $2.1-million of adjusted EBITDA and net income of $3.6-million. The net income recorded by Acasti in the prior year is due to the variation in the fair value of Acasti's derivative warrant liability.

Year-to-date financial results

Nutraceutical business results:

• Nutraceutical revenues were $12,585,000 for the nine-month period ended Nov. 30, 2015, versus $10,957,000 for the nine-month period ended Nov. 30, 2014.
• Adjusted EBITDA was negative ($5,493,000) for the nine-month period ended Nov. 30, 2015, improving over negative ($15,853,000) for the corresponding prior-year period.
• Net loss was $7,880,000 for the nine-month period ended Nov. 30, 2015, improving over a net loss of $20,299,000 for the corresponding prior-year period.

Consolidated results:

• Consolidated revenues totalled $12,602,000 for the nine-month period ended Nov. 30, 2015, compared with $11,049,000 for the corresponding prior-year period.
• Adjusted EBITDA was negative ($10,826,000) for the nine-month period ended Nov. 30, 2015, versus negative ($22,962,000) for the corresponding prior-year period.
• Net loss was $10.45-million for the nine-month period ended Nov. 30, 2015, versus a net loss of $19,143,000 in the corresponding prior-year period.

Cash flows

Consolidated cash and short-term investments were $19.2-million as at Nov. 30, 2015, comprising $5.1-million for Neptune and $14.1-million for Acasti. Neptune's Nov. 30, 2015, nutraceutical cash balance was up from $3.4-million in the prior quarter ending Aug. 31, 2015, due to the receipt of $1.3-million in Quebec investment tax credits, along with $500,000 for a business interruption insurance recovery relating to the 2012 Sherbrooke plant incident.

Productivity initiatives driving margin improvements

Project Turbo, a company-wide initiative introduced to drive efficiencies and heighten operating performance, remains on track and is already having a meaningful impact on margins. To date, Neptune has identified and implemented initiatives that will generate 75 per cent of the approximately $5.0-million targeted savings, with around 30 per cent of total savings already being reflected in the results as of Nov. 30, 2015.

Conference call details

Neptune will be holding a conference call on Jan. 13, 2016, at 8:30 a.m. ET to present its results for the third quarter ended Nov. 30, 2015.

Date:  Wednesday, Jan. 13, 2016

Time:  8:30 a.m. ET

Conference ID:  16340312

Call:  1-877-380-5664 (within Canada and the United States), 1-631-813-4882 (outside Canada and the U.S.) (Please dial in 15 minutes before the call begins.)

Webcast:  A live audio webcast can be accessed on the company's website.

An archived recording of the conference call will also be available on Neptune's website shortly after the call.

(1) Non-international financial reporting standards measure

We seek Safe Harbor.