Mr. Jim Hamilton reports

NEPTUNE ANNOUNCES FIRST QUARTER RESULTS

Neptune Technologies & Bioressources Inc. has released its financial and operating results for the first quarter ended May 31, 2016. All amounts are in Canadian dollars.

"We are very pleased with our results for the first quarter, which increased significantly over last year and also improved sequentially over the fourth quarter of fiscal 2016. These results reflect the contribution from sales growth and our productivity improvement initiatives put in place during the second quarter of last year," stated Jim Hamilton, president and chief executive officer of Neptune.

"We have evolved from pioneering the krill oil ingredient market to much more. With the recent acquisition of Biodroga, we are now in the business of customized unique nutrition solutions, speciality ingredients and consumer brands, which is now reflected in our new corporate image. Neptune's new positioning was designed to better communicate to our customers, investors and employees our capabilities and commitment to innovation, health and wellness included in our vision: to provide great nutrition solutions for optimal health and well-being.

"In this respect we recently obtained the exclusive North American rights to MaxSimil, a novel, patented delivery platform that enhances the absorption of lipid-based and lipid-soluble nutraceuticals. Statistically significant results suggest that the [eicosapentaenoic acid and docosahexaenoic acid] from MaxSimil fish oils were absorbed three times better than the regular fish oils in a clinical study. We recently completed in July our first sales of this new branded ingredient.

"We are also pleased to have completed our first sales in China, as Canada is one of only two countries allowed to sell krill into that market. Our growth and diversification strategy is starting to gain momentum. As such, we have revised our revenue guidance for fiscal 2017 and now expect revenues of above $43-million (from $41-million) and continue to anticipate a double-digit adjusted EBITDA margin," concluded Mr. Hamilton.

Nutraceutical business results:

• Nutraceutical revenues were $11.3-million for the three-month period ended May 31, 2016, versus $3.0-million in the first quarter ended May 31, 2015;
• Adjusted earnings before interest, taxes, depreciation and amortization (2) were $1,138,000 for the current quarter, compared with a non-international financial reporting standard operating loss of $3.2-million in the prior year;
• Net loss was $1.25-million for the current quarter, versus a net loss of $4.5-million in the prior year.

The nutraceutical segment first-quarter EBITDA improvement was mainly driven by higher revenues and a stronger gross margin, in percentage and in dollars, related to cost-reduction initiatives, including plant efficiencies and the Biodroga acquisition contribution. The reduction of the net loss reflects improvement of the EBITDA. The prior-year net loss also included unallocated production overhead costs.

Project Turbo, a company-wide initiative to drive efficiencies and operating performance, was put in place during the second quarter of fiscal 2016. To date (as of May 31, 2016), approximately 70 per cent of total expected cost savings, or approximately $5.0-million, were realized.

Consolidated results:

• Consolidated revenues totalled $11.3-million for the three-month period ended May 31, 2016, up from $2.7-million for the quarter ended May 31, 2015;
• Non-IFRS operating loss of $1,147,000 for the current quarter, versus $5.2-million in the prior year;
• Net loss was $3,824,000 for the current quarter, versus a net loss of $5.0-million in the prior year.

On a consolidated basis, the current quarter includes a non-IFRS operating loss of $2.3-million and a net loss of $3.2-million for Neptune's subsidiary, Acasti, which is actively engaged in clinical studies, and research and development. In the corresponding prior-year quarter ending May 31, 2015, Acasti recorded a non-IFRS operating loss of $1.9-million and a net loss of $1.0-million.

Cash flows

Consolidated cash and short-term investments, including $3-million of restricted short-term investments, were $14.6-million as at May 31, 2016, with $9.6-million for Acasti. If Acasti does not raise additional funds, there exists a material uncertainty that casts substantial doubt about Acasti's ability to continue as a going concern, and, therefore, realize its assets and discharge its liabilities in the normal course of business. Acasti's management has reasonable expectation that they will be able to raise additional funds.

Conference call details

Neptune will be holding a conference call on July 12, 2016, at 8 a.m. ET to present its results for the first quarter ended May 31, 2016.

Date:  Tuesday, July 12, 2016

Time:  8 a.m. ET

Conference ID:  44177587

Call:  1-877-223-4471 (within Canada and the United States) or 1-647-788-4922 (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) Neptune nutraceutical segment

(2) Non-IFRS financial measures

  RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA OR NON-IFRS OPERATING LOSS    
                   (expressed in thousands of dollars)  
                                                                
                                       Three-month period ended May 31, 2016
                     Nutraceutical  Cardiovascular    Intersegment     Total 
                                                      eliminations 
         
Total revenues            $ 11,254             $ 3               -  $ 11,257
Adjusted EBITDA
(non-IFRS
operating loss)              1,138          (2,285)              -    (1,147)
Net (loss)                  (1,250)         (3,154)            580    (3,824)
Total assets               121,227          25,746         (46,279)  100,694
Working capital             17,002           7,150               -    24,152
Adjusted EBITDA
(non-IFRS
operating loss)
calculation
Net (loss)                  (1,250)         (3,154)            580    (3,824)
Add (deduct)
Depreciation and
amortization                   766             609            (581)      794
Finance costs                  887             287             (45)    1,129
Finance income                  (1)            (59)             45       (15)
Change in fair
value of
derivative
financial
instruments                      3             (33)              1       (29)
Stock-based
compensation                   417              65               -       482
Income taxes                   292               -               -       292
Acquisitions
costs                           24               -               -        24
Adjusted EBITDA
(non-IFRS
operating loss)              1,138          (2,285)              -    (1,147)

                                                                            
                                       Three-month period ended May 31, 2015
                     Nutraceutical  Cardiovascular    Intersegment     Total
                                                      eliminations

Total revenues             $ 3,042             $ 5            (342)    2,705
Non-IFRS operating
loss                        (3,223)         (1,945)              -    (5,168)
Net (loss)                  (4,526)           (966)            526    (4,966)
Total assets               124,689          35,158         (66,591)   93,256
Working capital             18,032          15,824               -    33,856
Non-IFRS operating
loss calculation
Net (loss)                  (4,526)           (966)            526    (4,966)
Add (deduct)
Depreciation and
amortization                   593             588            (581)      600
Finance costs                  381              87               -       468
Finance income                 (13)            (21)              -       (34)
Change in fair
value of
derivative
financial
instruments                      -          (1,708)             55    (1,653)
Stock-based
compensation                   342              75               -       417
Non-IFRS operating
(loss)                      (3,223)         (1,945)              -    (5,168)

We seek Safe Harbor.