Cyanotech Corporation Reports Third Quarter Fiscal 2004 Financial Results
Company Reports Net Income of $109,000 on Increased Sales and Improved Gross Margin
KAILUA KONA, Hawaii--Feb. 2, 2004--Cyanotech
Corporation (Nasdaq:CYAN), a world leader in producing high-value
natural products from microalgae, today announced financial results
for the third quarter of its fiscal year 2004, ended December 31,
2003.
For the third quarter of fiscal 2004 the Company reported net
income of $109,000, or $0.01 per diluted share, on sales of
$3,024,000, compared to a net loss of $180,000, or ($0.01) per diluted
share, for the comparable prior year period. The net sales for the
quarter ended December 31, 2003 represent an increase of 6% from
$2,840,000 recorded for the prior quarter and a year-over-year
increase of 22% from $2,474,000 recorded for the comparable prior year
period.
The Company achieved a gross profit margin of 39% for the quarter
ended December 31, 2003, up from 30% in the prior quarter and 29% for
the comparable prior year period. The improvement in gross profit
margin from the prior quarter resulted from the effects of
improvements in the Company's cultivation processes, with the
year-over-year improvement due primarily to increased bulk sales of
higher margin natural astaxanthin products, NatuRose® and
BioAstin®. During the third quarter, operating expenses remained at
29% of sales, increasing by $63,000 from the expense level reported
for the prior quarter. Improved gross profits, higher sales and a
consistent level of operating expenses resulted in operating income of
$292,000 for the third quarter of fiscal 2004, up from $32,000 in the
prior quarter and contrasting with the loss from operations of
$115,000 recorded for the comparable prior year period.
Net sales for the first nine months of fiscal 2004 were
$8,292,000, an increase of 27% from $6,524,000 recorded for the
comparable prior year period. The growth in revenues resulted from
increased bulk sales of the Company's natural astaxanthin products.
For the first nine months of fiscal 2004, the Company reported a net
loss of $42,000, or ($0.00) per diluted share, compared to the net
loss of $1,505,000, or ($0.09) per diluted share, reported for the
comparable period of the prior fiscal year.
The Company enters the final quarter of fiscal 2004 with working
capital of $3,141,000 and a cash and cash equivalent balance of
$1,517,000. This is in contrast to working capital of $2,352,000, and
a cash and cash equivalent balance of $579,000 reported at the
beginning of the current fiscal year. Furthermore, the voluntary
conversion of a $1,250,000 convertible debenture to common stock in
December 2003 has reduced long-term liabilities and increased net
equity.
"We are extremely pleased by our return to profitability this
quarter," said Gerald R. Cysewski, Ph.D., Chairman, President and
Chief Executive Officer. "Our focus on all-around improvement in our
operations has been validated by demonstrating sequential growth in
sales, improved gross profit margins, increasing cash balances and
profitability. These achievements are the result of hard work and
determination of every employee of the Company." Dr. Cysewski added,
"We are committed and determined to continue our efforts in sustaining
profitability and growth in future periods."
About Cyanotech
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® natural
astaxanthin, a powerful antioxidant with expanding applications as a
human nutraceutical; NatuRose® natural astaxanthin for the
aquaculture and animal feed industries; Spirulina Pacifica®, 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 of 1995
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.
Webcast
Cyanotech Corporation will hold a conference call on Monday,
February 2, 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
Financial Results Webcast February 2, 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)
(Unaudited)
Three Months Ended Nine Months Ended
December 30, December 30,
------------------ -----------------
2003 2002 2003 2002
--------- -------- -------- --------
NET SALES $ 3,024 $ 2,474 $ 8,292 $ 6,524
COST OF PRODUCT SALES 1,840 1,763 5,543 4,460
--------- -------- -------- --------
Gross profit 1,184 711 2,749 2,064
--------- -------- -------- --------
OPERATING EXPENSES:
Research and development 53 38 117 184
Sales and marketing 298 354 961 1,377
General and administrative 541 434 1,397 1,491
--------- -------- -------- --------
Total operating expenses 892 826 2,475 3,052
--------- -------- -------- --------
Income (loss) from operations 292 (115) 274 (988)
--------- -------- -------- --------
OTHER INCOME (EXPENSE):
Interest income 1 6 13 23
Interest expense (84) (92) (250) (339)
Other income (expense), net 14 21 17 (201)
--------- -------- -------- --------
Total other expense (69) (65) (220) (517)
--------- -------- -------- --------
Income (loss) before income
taxes 223 (180) 54 (1,505)
INCOME TAX PROVISION 114 - 96 -
--------- -------- -------- --------
NET INCOME (LOSS) $ 109 $ (180) $ (42) $(1,505)
========= ======== ======== ========
NET INCOME (LOSS) PER SHARE
Basic $ 0.01 $ (0.01) $ (0.00) $ (0.09)
========= ======== ======== ========
Diluted $ 0.01 $ (0.01) $ (0.00) $ (0.09)
========= ======== ======== ========
SHARES USED IN CALCULATION OF NET
INCOME (LOSS) PER SHARE:
Basic 18,777 18,284 18,471 17,703
========= ======== ======== ========
Diluted 18,934 18,284 18,471 17,703
========= ======== ======== ========
COMPREHENSIVE INCOME (LOSS):
Net income (loss) $ 109 $ (180) $ (42) $(1,505)
Other comprehensive income 9 8 28 10
--------- -------- -------- --------
$ 118 $ (172) $ (14) $(1,495)
========= ======== ======== ========
CYANOTECH CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands except per share amounts)
(Unaudited)
December March
31, 31,
2003 2003
----------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 1,517 $ 579
Accounts receivable, net 1,862 1,839
Refundable income taxes 3 9
Inventories 1,449 1,400
Prepaid expenses 85 40
----------- ----------
Total current assets 4,916 3,867
Equipment and leasehold improvements, net 11,951 12,777
Other assets 618 838
----------- ----------
Total assets $ 17,485 $ 17,482
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 323 $ 323
Accounts payable 880 803
Accrued expenses 572 389
----------- ----------
Total current liabilities 1,775 1,515
Long-term debt, excluding current maturities 2,200 3,694
----------- ----------
Total liabilities 3,975 5,209
----------- ----------
Stockholders' equity:
Common Stock of $0.005 par value,
shares authorized 25,000,000; shares
issued and outstanding 20,242,277
at December 31, 2003 and 18,316,701
at March 31, 2003 101 92
Additional paid-in capital 26,660 25,418
Accumulated other comprehensive income
(loss) -- foreign currency
translation adjustments 25 (3)
Accumulated deficit (13,276) (13,234)
----------- ----------
Total stockholders' equity 13,510 12,273
----------- ----------
Total liabilities and stockholders' equity $ 17,485 $ 17,482
=========== ==========
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