Full Press Release Details
Cyanotech Corporation Reports Second Quarter Fiscal 2005 Financial Results;
Reports Sales of $2,998,000, Net Income of $121,000
KAILUA KONA, Hawaii--(BUSINESS WIRE)--Nov. 1, 2004--Cyanotech Corporation
(Nasdaq:CYAN), a world leader in producing high-value natural products from
microalgae, today announced financial results for the second quarter of its
fiscal year 2005, ended September 30, 2004.
Sales for the second quarter of fiscal 2005 were $2,998,000, a sequential
increase of 11 percent from the $2,707,000 reported in the first quarter and a
year-over-year increase of 6 percent compared to the $2,840,000 reported for the
same quarter a year ago. The company noted that demand for natural Astaxanthin
during the quarter was impacted by inclement environmental factors in Japan
which affected customers' fish farming operations, as well as by competitive
pricing issues from synthetic Astaxanthin products in Europe.
Net income for the second quarter was $121,000, or $0.01 per fully diluted
share, compared to net income for the first quarter of fiscal 2005 of $113,000,
or $0.01 per fully diluted share, and compared to net loss of $10,000, or $0.00
per fully diluted share for the comparable quarter of the prior fiscal year.
Gross profit for the second quarter was $1,054,000 with a gross profit
margin of 35 percent. These results are an improvement over both the prior
quarter's gross profit of $887,000 with a gross profit margin of 33 percent, as
well as the second quarter of fiscal 2004 results of gross profit of $861,000
with a gross profit margin of 30 percent.
The company's cash and cash equivalents decreased by $136,000 from the
March 31, 2004 balance of $2,531,000 to $2,395,000 at September 30, 2004.
Working capital increased by $391,000 from $4,083,000 at March 31, 2004 to
$4,474,000 at September 30, 2004.
For the first six months of fiscal 2005, the company reported sales of
$5,705,000, gross profit of $1,941,000 and net income of $234,000, or $0.01 per
fully diluted share. This represents an improvement from sales of $5,268,000,
gross profit of $1,565,000 and contrasts with the net loss of $151,000 reported
for the first six months of the prior fiscal year.
Cyanotech's Chairman, President and Chief Executive Officer, Gerald R.
Cysewski, said, "This is the company's fourth consecutive quarter of
profitability. Our increased revenue and year-over-year improved gross profit
margin of five basis points for the quarter, as compared to the comparable
quarter of the prior fiscal year, demonstrate our company's progress in sales,
product mix and reduced production costs since the last fiscal year. Demand for
NatuRose(R) was lower than we anticipated due in large part to the effect of
weather on our customer's operations in Japan but we believe our market there
remains strong in spite of the difficulties encountered by the Japanese
"While we anticipate demand for natural astaxanthin over the next two
quarters to be consistent with that of current quarter levels, we believe the
demand will rebound in the future to levels consistent with prior demand
patterns. The conversion of certain of our Spirulina ponds to Astaxanthin ponds
to increase Astaxanthin production is proceeding on target, with expected
completion by the end of calendar year 2004. Upon completion, the converted
ponds will increase our flexibility to adjust production as required to respond
to the varying demands of the marketplace." Dr. Cysewski concluded, "We continue
to make strategic investments in operations and infrastructure proportionate to
our increase in revenues and improved gross profit. We are controlling our
expenditures well and allocating our resources appropriately as we move our
Cyanotech Corporation, a world leader in microalgal technology, produces
high-value natural products from microalgae and is the world's largest
commercial producer of natural astaxanthin (pronounced "asta-zan-thin") from
microalgae. Products include BioAstin(R) natural astaxanthin, a powerful
antioxidant with expanding applications as a human nutraceutical; NatuRose(R)
natural astaxanthin for the aquaculture and animal feed industries; Spirulina
Pacifica(R), a nutrient-rich dietary supplement; and phycobiliproteins, which
are fluorescent pigments used in the immunological diagnostics market. Spirulina
Pacifica and BioAstin are sold directly online through the Company's website,
www.nutrex-hawaii.com, as well as through resellers in over 30 countries
worldwide. Technical information for the Company's phycobiliproteins products is
available at www.phycobiliprotein.com. Corporate data and other product
information are available at www.cyanotech.com.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act
Except for statements of historical fact, the statements in this press
release are forward-looking. Such statements are subject to a number of risks
and uncertainties that could cause actual results to differ materially from the
statements made. These factors include, but are not limited to, general economic
conditions, forecasts of sales in future periods, changes in sales levels to our
largest customers, weather patterns, risks associated with the acceptance of new
products, competition, foreign exchange fluctuations, government regulation, and
other factors more fully detailed in the Company's recent Form 10-Q and annual
form 10-K filings with the Securities and Exchange Commission.
Cyanotech Corporation will hold a conference call on Monday, November 1,
2004 at 5:30 p.m. Eastern Time to be broadcast live over the Internet. It can be
accessed by all interested parties by linking through the Investor Broadcast
Network's VCall website at www.vcall.com or through Cyanotech's website,
http://www.cyanotech.com. To access the simultaneous webcast on the Cyanotech
site, select the Recent News section from Cyanotech's home page. Click on the
announcement entitled, "Cyanotech Announces Fiscal Year 2005 Second Quarter
Financial Results Webcast November 1, 2004." To listen to the live call, please
go to either website at least 15 minutes prior to the start of the call to
register, download, and install any necessary audio software. For those who are
not able to listen to the live broadcast, a replay will be available shortly
after the call and will be archived for a period of one calendar year.
CYANOTECH CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Six Months
September 30, September 30,
---------------- ----------------
------- ------- ------- -------
NET SALES $ 2,998 $ 2,840 $ 5,705 $ 5,268
COST OF PRODUCT SALES 1,944 1,979 3,764 3,703
------- ------- ------- -------
Gross profit 1,054 861 1,941 1,565
------- ------- ------- -------
Research and development 62 26 127 64
Sales and marketing 297 354 591 663