Neptune Wellness Solutions Inc.

Good morning, ladies and gentlemen, and welcome to the Neptune Wellness Solutions, Inc. Fourth Quarter and Fiscal 2022 Earnings Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. Also note that the call is being recorded on Monday, July 11, 2022. And I would like to turn the conference over to Maury Browne, Vice President, Investor Relations for Neptune Wellness Solutions. Please go ahead, sir.

Thank you, operator. And hello, everyone. Thank you for joining us today for the Neptune Wellness Solutions fourth quarter and fiscal 2022 earnings conference call. With me today are Michael Camerata, President and Chief Executive Officer, and Randy Weaver, Interim Chief Financial Officer. All amounts discussed today are in U.S. dollars, and our remarks may contain forward-looking information representing our expectations as of today and may be subject to change. Today's conference call contains non-GAAP measures, specifically adjusted EBITDA, to provide investors with a supplemental measure of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on GAAP financial measures. Management also uses adjusted EBITDA in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets, and assess our ability to meet our capital expenditure and working capital requirements. Adjusted EBITDA is not a recognized, defined, or standardized measure under GAAP. Our definition of adjusted EBITDA will likely differ from that used by other companies, including our peers, and therefore, comparability may be limited. Non-GAAP measures should not be considered a substitute for or in isolation from measures prepared in accordance with GAAP. Investors are encouraged to review our financial statements and disclosures in their entirety and are cautioned not to put undue reliance on non-GAAP measures and view them in conjunction with the most comparable GAAP financial measures. We do not undertake any obligation to update any forward-looking statement, except as may be required by Canadian and U.S. securities laws. Assumptions were made in preparing these forward-looking statements, which are subject to risk, as laid out in our public filings found on CDAR and EDGAR. I'll now turn the call over to Michael.

Thank you, Maury, and hello, everyone. This morning, we reported our fiscal fourth quarter and the full 2022 results for the period ended March 31, 2022. Before providing further details related to our financial and operational highlights for the 2022 fiscal year and our fourth quarter, I would like to take a moment to discuss the strategic decisions management and the board have recently made. Taking into account all factors, including the current macroeconomic environment conditions, we believe these decisions are in the best interest of the company and its shareholders. In early June, we announced the launch of our strategic review plan, which centers on Neptune becoming a pure play consumer package good company. As part of that plan, we intended to reduce costs, refine the current focus of the company, and ultimately put us on an accelerated path to profitability and enhance shareholder value. The strategic plan has culminated in two primary actions so far. the planned divestiture of our cannabis business in Canada, and two, the realignment of our focus and operational resources towards our portfolio of Good For You and Good For The Planet consumer-branded products that have large addressable markets in categories where we are seeing the most demand and therefore the highest growth potential. The intended sale of the cannabis business would include the Moon Ring and Panhass brand, along with the Sherbrooke facility in Quebec, which was recently appraised at $21 million. In order to accelerate our cost savings, we are focusing on winding up our cannabis operations. This planned action is intended to provide significant cost savings and help maximize operational efficiencies, resulting in a 50% reduction in the workforce and over 30% reduction of the total payroll cost, and an estimated annual savings of $4.4 million. We have also enacted additional initial cost cuts at the corporate level. This includes reductions in the corporate headcount, and external consultants. Headcount at the corporate level has been reduced by 16%, which we expect to result in a savings of $1.2 million in payroll costs. We have reopened our strategic review and will continue to look for synergies and additional savings across our corporate structure and business units. This plan builds on our initial strategic review that took place in the fall of 2021. and is the final step of our transition to a pure-play, purpose-driven consumer packaged goods company. It simplifies our overall structure, enables us to get hyper-focused on the areas of the businesses we believe are the best positioned for profitability the strategic review last fall, we have announced cost cuts of approximately $16 million. This includes $5.6 million of payroll costs reductions for the cannabis and corporate announced in the last month. These are difficult decisions when they involve valued employees. However, we believe this is the prudent decision to make to ensure Neptune is financially positioned to achieve its long-term goals and increase shareholder value. Before I move on to our operational highlights, I'd like to invite Julie Phillips, chair of our board, to say a few words about the recent appointments we've made to our board and executive team.