Mr. Michael Cammarata reports
NEPTUNE WELLNESS SOLUTIONS INC. PROVIDES BUSINESS AND STRATEGY UPDATE
Neptune Wellness Solutions Inc. has provided a business and strategy update. Over the past year, Neptune has undergone a significant transformation from a business-to-business cannabis and hemp extraction company to a fully integrated consumer products company. The company's long-term strategy is focused on the health and wellness sector with an emphasis on select consumer-packaged-good verticals, including cannabis, nutraceuticals, beauty and personal care, and organic foods and beverages. Neptune's current innovative and disruptive brand portfolio across these verticals include Mood Ring, PanHash, Sprout, NurturMe, Nosh, Neptune Wellness, Forest Remedies and Ocean Remedies.
The company intends to continue organically building out its existing brand portfolio through innovation and contributions from its product development and research and development teams.
"We have made tremendous progress transforming a 22-year-old company in less than two years. We are in a unique time in history, and we believe that the opportunities ahead of us are immense," said Michael Cammarata, president and chief executive officer of Neptune. "We are forging a new path in consumer health and wellness, with industry-changing implications. We are confident that our actions will position us for strong, disciplined growth, margin expansion and the development of a portfolio of innovative and defensible products and brands.
"Today, all our business verticals, except cannabis, are positively contributing to gross margin. Mood Ring has exceeded our expectations and will achieve scalability soon. Transforming from a B2B cannabis and hemp extractor to a full-scale disruptive and diversified CPG company during an unprecedented global pandemic and economic instability around the world, while challenging, was absolutely the right thing to do for the long-term value creation our shareholders expect. I am thankful to have the unanimous support of the board of directors, the overwhelming support and patience of our long-term institutional investors, and, most of all, the hard work of our associates at Neptune to make this transformation a success.
"Neptune's future will be focused on brand creation, accelerated organic growth complemented by new acquisitions with operational excellence as our foundation. The first step toward this new strategy is a lineup of CBD-infused beverages starting with teas and lemonades, that is expected to launch into the U.S. market later this year. Additionally, we will introduce a disruptive plant-based omega 3-6-9 product in the U.S. market as well as plant-based tableware and utensils."
"Michael's vision, unanimously supported by the board of directors, positions the company for accelerated growth across multiple business verticals," said John Moretz, chairman of the board of directors for Neptune. "The scale of Neptune's transformation is truly remarkable and should position the company for significant long-term topline growth. I have long said the most successful companies in any industry must continually transform and evolve to changing conditions. Michael's vision to quickly evolve in the face of a global pandemic and economic strife was the right decision at the right time."
Following the request of the company's current management, the board has decided to expand the leadership team to support the execution of the company's vision. Neptune will be adding a president dedicated to supporting the North American CPG brand portfolio. This position, when filled, will report directly to Mr. Cammarata. Additionally, Neptune recently hired Emily Fletty as vice-president of human resources, who brings significant experience leading human resources functions at multiple dynamic growth organizations.
Organic foods and beverages
Neptune acquired a controlling interest in Sprout Foods Inc. in February, 2021, and the full integration is ahead of expectations. Sprout is an integral piece of Neptune's health and wellness portfolio and represents a key brand within the organic foods and beverages vertical. Since completing the Sprout acquisition, the company has begun expansion efforts in Sprouts' distribution substantially in all of Target's United States retail stores. The company also expects to launch Sprout products in Canada and the United Kingdom during the second fiscal quarter.
Neptune is focused on expanding its exclusive omega-3 delivery technology MaxSimil while improving growth and profitability in its nutraceuticals vertical. This includes expanding the supply and manufacturing base, which is expected to significantly lower production costs and improve gross margins and returns on invested capital. The MaxSimil product lineup will be expanded with the launch of two new consumer products: MaxSimil with coenzyme Q10 and MaxSimil with curcumin. Additionally, the company plans to launch a new consumer line of vitamin sprays and pumps for both children and adults with selected retail partners. To support anticipated accelerated growth, the nutraceuticals U.S. sales force has been expanded to maximize awareness and distribution of the capabilities and expertise in CBD formulation, prebiotics and probiotics, and proteins within this important vertical.
Neptune made significant progress expanding its product distribution in the Canadian cannabis market over the last several months. The company received authorization to sell its Mood Ring and PanHash products in four provinces (British Columbia, Ontario, Alberta and Quebec). Products are currently sold in B.C. and Ontario, with plans to begin sales in Alberta and Quebec soon. Additionally, Neptune recently received a licence amendment from Health Canada to allow the sale of dried cannabis flower and prerolled cannabis joints throughout the Canadian market.
Shareholder class action
On March 16, 2021, a purported class action was filed in the United States District Court for the Eastern District of New York against the company and certain of its current and former officers alleging violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934. The company believes these claims are without merit and intends to vigorously defend itself.
About Neptune Wellness Solutions Inc.
Neptune Wellness Solutions is a unique global health and wellness company that is changing consumer habits through the creation and distribution of environmentally friendly, ethical and innovative consumer product goods. Neptune's simultaneous focus on B2C (business to consumer) and B2B (business to business) customer-oriented brand development provides the company with international reach and scale from its owned and operated facilities that extract and create product formulation, all the way to the sales floor at top global retailers. Underpinned by a disruptive spirit, Neptune's diversified and fully integrated business model focuses on natural, plant-based, sustainable and purpose-driven lifestyle brands and the use of cannabinoids in household products to make them safer, healthier and more effective. Its portfolio includes emerging brands such as Forest Remedies, Ocean Remedies, Neptune Wellness, Mood Ring and OCEANO3, which are poised for rapid growth and expansion. Backed with a cost-efficient manufacturing and supply chain infrastructure that can be scaled up and down or into adjacent product categories to identify new innovation opportunities, Neptune quickly adapts to consumer preferences and demand, and is bringing its products as well as other Fortune 100 brands to market through strategic distribution partnerships, mass retail partners and e-commerce channels. Neptune is committed to its core mission of redefining health and wellness and helping humanity thrive by providing sustainable consumer focused solutions.
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