Neptune shuffles management suite after recapitalization, continued losses

26-May-2014 - Last updated on 13-Jun-2014 at 00:38 GMT

Neptune Technologies and Bioressources is remaking its management team as the company nears reentry into the krill oil marketplace as a producer. Longtime chief executive officer Henri Harland is out, with chief financial officer Andre Godin named as interim CEO. The news comes on the heels of a recapitalization of the company via a public offering and a subsequent large private placement of shares, and announcement of fourth quarter 2013 results showing continued losses.

Neptune has struggled to maintain customers and market share since the destruction of its lone production facility in Sherbrooke, Quebec was destroyed in an explosion and subsequent fire in November 2012. The company’s position in connection to its customers and its outstanding contracts was eased somewhat with the announcement of a licensing and supply deal in October, 2013 with the newest entry into the krill oil supply picture, Norway’s Rimfrost. Neptune is targeting a June reopening of the rebuilt plant. That, and the resolution of the longstanding patent disputes with competitors Aker BioMarine of Norway and Enzymotec of Israel means brighter days ahead, Godin said.

“We have a high-tech facility and strong management expertise – which will improve service, encourage innovation and heighten performance – all for the greater good of our employees, customers, and shareholders. On top of this, we have successfully resolved all outstanding litigation issues related to the U.S. International Trade Commission's (ITC) investigation into infringement of Neptune's composition of matter patents. We will now focus on strong execution as we reaffirm our role as a premier krill oil manufacturer in the fast growing omega-3 nutraceutical market,” Godin said.

Additional cash

In March, Neptune completed a public offering of shares that netted the company $28 million. Later in April, the company completed a follow-on private placement of shares that bought in an additional $2.5 million.

Neptune-shuffles-management-suite-after-recapitalization-continued-losses_medium — Neptune released this image of its rebuilt production facility.

Harland was one of the co-founders of the company (founded in 1998) and had been involved with the commercialization of krill oil since 1991, according to information from Forbes magazine. His tenure saw Neptune complete some of the first studies on the ingredient and be the first to market with krill oil as a human nutrition ingredient, and also saw the company secure the important first patents on krill oil in a number of markets. Shifts in managment suite personnel are not unusual during times of major capital restructuring, however.

The need for additional captial has been apparent as the company continues to report losses. In the most recent earnings statement, Neptune reported a negative $1.46 million in adjusted EBITDA for the quarter. The company’s financial picture was buoyed by the first royalty payments received under the new licensing agreements with its competitors. Neptune said it has received $5.5 million in such payments by the end of the quarter which ended Nov. 28, 2014.