Monday, 30 April 2007

Neptune Q3 Shows 66% Increase in Sales. US Listing Well Underway


Neptune has now released its third quarter. The results can be accessed here.

We are pleased to see the sales increase underway once again after a flattening out during the first half of the year attributed to a churning of the sales force. Operating revenues for the three months were up 66% to $2.9 million compared to $1.7 million for Q3 2006 and total sales up 34% to $6.4 million compared to $4.8 million for the nine month comparisons.

EBITDA margin increasing from 13% to 25% and this corresponding efficiency has led to EBITDA increasing at a faster rate than sales - up 206% to $719 thousand vs. $235 thousand during Q3 2006. The nine months shows similar results with EBITDA increasing 91% to $1.6 million vs. $822 thousand.

Neptune is still operating at a loss from continuing operations, but that loss has decreased from $734 from Q3 2006 to $454 thousand ($0.022 per share vs. $0.013). Should sales growth continue at its current pace combined with increasing efficiencies, we expect Neptune to be operating in the black soon. Net loss from continuing operations for the nine months decreased 25%, to $1.2 million compared to $1.6 million ($0.034 per share vs $0.045)

Of particular interest to investors, Neptune updated investors on it's U.S. filing process. Neptune has completed its application to list on the American Stock Exchange (AMEX) and states that it "expects to receive approval early [June 2007]"

Neptune further disclosed that creating easier access for U.S. investors to participate in the companies success is logical considering 85% of Neptune's sales are generated from the United States.

Neptune has also amended its stock option plan increasing the total number of stock options available in the plan from 4,350,000 to 6,850,000. On April 25th, 2007 the Board of Directors agreed to grant 925,000 options to directors, officers and employees of which 525,000 will be vested to board members and top management over a period of two years. Each of these options will allow its holder to acquire a common share of Neptune at a price of $7.25 until May 1st, 2010.