Category: Nutrascience

Cyanotech Reports Financial Results for the Third Quarter and First Nine Months of Fiscal 2012

— Net Sales Increase 71% for Third Quarter —

Cyanotech Corporation (Nasdaq Capital Market: CYAN), a world leader in microalgae-based, high-value nutrition and health products, today announced financial results for the third quarter and first nine months of fiscal year 2012, ended December 31, 2011.

Third Quarter 2012
For the third quarter of fiscal 2012 compared to the third quarter of fiscal 2011, revenues were $6,706,000 compared to $3,919,000. Gross profit was $2,827,000, with gross profit margin of 42%, compared to gross profit of $1,232,000 and gross profit margin of 31%. Net income was $1,113,000 or $0.20 per diluted share, compared to net income of $10,000 or $0.00 per diluted share.

Nine Months 2012

For the first nine months of fiscal 2012 compared to the first nine months of fiscal 2011, revenues were $18,645,000 compared to $11,609,000. Gross profit was $7,721,000, with gross profit margin of 41%, compared to gross profit of $4,543,000 and gross profit margin of 39%. Net income was $2,473,000 or $0.45 per diluted share, compared to net income of $935,000 or $0.17 per diluted share.

Trailing 12 Months

For the trailing 12 months ended December 31, 2011, compared to the trailing 12 months ended December 31, 2010, revenues were $23,863,000 compared to revenues of $15,423,000. Gross profit was $9,519,000, with gross profit margin of 39.9%, compared to gross profit of $5,931,000 and gross profit margin of 38.5%. Net income was $3,268,000 or $0.60 per diluted share, including a non-cash tax benefit of $552,000 due to a reduction in the deferred tax valuation allowance and recording of a net deferred tax asset in the fourth quarter of fiscal 2011, compared to $709,000, or $0.13 per diluted share. Income before income tax was $2,771,000 compared to $715,000.

Commenting on the third quarter results, Brent Bailey, President and CEO, said “We continued to make progress on key measures in the third quarter compared to the third quarter of fiscal 2011:

    Net sales reached a record level for the fourth consecutive quarter at $6,706,000 (+$2,787,000 and +71%)
    Gross margin increased to 42.2% (+10.8 pts.)
    Net Income grew to $1,113,000 (+$1,103,000)
    Cash increased to $4,190,000 (+$3,461,000 and +475%)
    Inventory declined to $3,556,000 (-$800,000 and -18%)

“In addition, our Nutrex-branded sales grew +74% largely driven by the mainland US natural products distribution channel.”

For the third quarter of fiscal 2012, Spirulina sales accounted for 31% of total revenues and natural Astaxanthin sales for 69%. International sales were 29% of total sales.

Mr. Bailey noted, “Abundant inventory coming out of last winter, plus eight consecutive monthly astaxanthin production records, allowed us to fully capitalize on the strong growth in spirulina and the exceptional growth in astaxanthin resulting in four consecutive record net sales quarters. While demand continues to grow, our production generally declines during the winter months largely due to less sunlight. Going forward, our astaxanthin capacity will increase by 33% in the spring as we bring new ponds on line in April.”

About Cyanotech — Cyanotech Corporation, a world leader in microalgae technology, produces BioAstin® Natural Astaxanthin and Hawaiian Spirulina Pacifica®—all natural, functional nutrients that leverage our experience and reputation for quality, building nutritional brands which promote health and well-being. Cyanotech's Spirulina products offer complete nutrition, and augment energy and immune response. They are FDA-reviewed and accepted as Generally Recognized as Safe (GRAS) for use in food products. BioAstin's superior antioxidant activity and ability to support and maintain a natural anti-inflammatory response enhance skin, muscle and joint health. All Cyanotech products are produced from microalgae grown at its 90-acre facility in Kona, Hawaii using patented and proprietary technology. Cyanotech distributes to nutritional supplement, nutraceutical and cosmeceutical manufacturers and marketers in more than 54 countries worldwide. Cyanotech was the first microalgae company in the world to obtain quality management standards ISO 9001:2000 certification and is GMP-certified by the Natural Products AssociationTM. Visit www.cyanotech.com for more information.

“Safe Harbor” Statement under the U.S. Private Securities Litigation Reform Act of 1995 Besides statements of present fact and historical fact, this press release may contain forward-looking statements. Forward-looking statements relate to the future and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by forward-looking statements. We caution against relying on forward-looking statements. Important factors that could change actual, future results include: changes in sales levels to our largest customers, weather patterns in Hawaii, production problems, risks associated with new products, foreign exchange fluctuations, and availability of financing, as well as national and global political, economic, business, competitive, market and regulatory conditions. Other factors are more fully detailed in the Company’s recent Form 10-Q and annual Form 10-K filings with the Securities and Exchange Commission.

(Financial Tables Follow: The following tables do not contain footnotes or other information contained in the Company’s Form 10-Q for the period ended December 31, 2011. As such the following Financial Tables are provided only as a guide and other factors are more fully detailed in the Company’s Form 10-Q and annual Form 10-K filings with the Securities and Exchange Commission.)

 

 
CYANOTECH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 
(Dollars in thousands except par value and number of shares)
(Unaudited)
 
        December 31,
2011
        March 31,
2011
 
ASSETS                    
Current assets:                    
Cash and cash equivalents       $ 4,190         $ 2,062  
Accounts receivable, net of allowance for doubtful accounts of $52 at
December 31, 2011 and $58 at March 31, 2011
      2,855         2,641  
Inventories, net       3,556         3,627  
Deferred tax assets       17         17  
Prepaid expenses and other assets       374         134  
Total current assets       10,992         8,481  
                     
Equipment and leasehold improvements, net       5,416         4,557  
Deferred tax assets       535         535  
Other assets       291         287  
Total assets       $ 17,234         $ 13,860  
                     
LIABILITIES AND STOCKHOLDERS’ EQUITY                    
Current liabilities:                    
Current maturities of long-term debt       $ 234         $ 204  
Customer deposits       39         115  
Accounts payable       1,194         1,054  
Accrued expenses       1,343         823  
Total current liabilities       2,810         2,196  
                     
Long-term debt, excluding current maturities       457         553  
Total liabilities       3,267         2,749  
                     
Commitments and contingencies                    
                     
Stockholders’ equity:                    
Common stock of $0.02 par value, shares authorized 7,500,000; 5,434,598
shares issued and outstanding at December 31, 2011 and 5,391,968
shares at March 31, 2011
      109         108  
Additional paid-in capital       28,185         27,803  
Accumulated deficit       (14,327 )       (16,800 )
Total stockholders’ equity       13,967         11,111  
                     
Total liabilities and stockholders’ equity       $ 17,234         $ 13,860  
                         
 
CYANOTECH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
(Dollars in thousands, except per share amounts)
(Unaudited)
 
        Three Months Ended
December 31,
        Nine Months Ended
December 31,
 
        2011         2010         2011         2010  
                                         
NET SALES       $ 6,706         $ 3,919         $ 18,645         $ 11,609  
COST OF SALES       3,879         2,687         10,924         7,066  
Gross profit       2,827         1,232         7,721         4,543  
                                         
OPERATING EXPENSES:                                        
General and administrative       955         630         3,019         2,036  
Sales and marketing       631         502         1,808         1,278  
Research and development       77         83         237         229  
Loss on disposal of equipment and leasehold improvements       1                 65          
Total operating expenses       1,664         1,215         5,129         3,543  
                                         
Income from operations       1,163         17         2,592         1,000  
                                         
Interest expense, net       (14 )       (16 )       (38 )       (54 )
                                         
Income before provision for income taxes       1,149         1         2,554         946  
                                         
PROVISION FOR (BENEFIT FROM) INCOME TAXES       36         (9 )       81         11  
                                         
NET INCOME       $ 1,113         $ 10         $ 2,473         $ 935  
                                         
NET INCOME PER SHARE:                                        
Basic       $ 0.21         $ 0.00         $ 0.46         $ 0.18  
Diluted       $ 0.20         $ 0.00         $ 0.45         $ 0.17  
                                         
SHARES USED IN CALCULATION OF NET INCOME PER SHARE:                                        
Basic       5,424         5,392         5,406         5,340  
Diluted       5,571         5,423         5,490         5,366  

 

 

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