KAILUA KONA, Hawaii--May 11, 2004--Cyanotech
Corporation (Nasdaq:CYAN), a world leader in producing high-value
natural products from microalgae, today announced financial results
for the fourth quarter and fiscal year ended March 31, 2004.
Financial Results -- Fiscal 2004
For the 12 months ended March 31, 2004 (Fiscal 2004), the Company
reported net income of $399,000, or $0.02 per diluted share,
contrasting with the net loss of $1,775,000, or ($0.10) per diluted
share reported for the prior fiscal year. Net sales for fiscal 2004
were $11,582,000, an increase of 29% from the prior fiscal year's
sales of $8,951,000. Foreign sales accounted for 53% of total sales
for fiscal 2004, compared to 54% reported for fiscal 2003. The growth
in revenues resulted from increased bulk sales of the Company's
natural astaxanthin products: NatuRose® and BioAstin®.
For fiscal 2004, gross profit was $3,940,000, compared to
$2,895,000 reported for fiscal 2003. The Company recorded a gross
profit margin of 34% for fiscal 2004, up slightly from gross profit
margin of 32% reported for fiscal 2003. This improvement in gross
profit and gross profit margin was due to increased bulk sales of
higher margin NatuRose and BioAstin products and to improvement in
product cultivation and processing. During fiscal 2004, operating
expenses decreased by 22% to $3,211,000 from the $4,105,000 reported
for fiscal 2003. Increased sales and a reduced level of operating
expenses resulted in operating income of $729,000 for fiscal 2004, in
contrast to the loss from operations of $1,210,000 reported for the
prior fiscal year.
The Company ended fiscal 2004 with working capital of $4,083,000
and cash and cash equivalents of $2,531,000, compared to working
capital of $2,352,000, and cash and cash equivalents of $579,000
reported at the beginning of the fiscal year.
Financial Results -- Fourth Quarter FY 2004
For the fourth quarter of fiscal 2004, the Company reported net
income of $441,000, or $0.02 per diluted share, on sales of
$3,290,000, an improvement from net income of $109,000 or $0.01 per
diluted share in the third quarter of fiscal 2004 and contrasting with
the net loss of $270,000 or ($0.01) per diluted share reported for the
comparable prior year period. Net sales for the fourth quarter of
fiscal 2004 increased by 9% from $3,024,000 recorded for the third
quarter of fiscal 2004 and by 36% from $2,427,000 recorded for the
fourth quarter of the prior fiscal year. Foreign sales accounted for
53% of total sales in the fourth quarter of fiscal 2004, compared to
52% reported for the comparable period of fiscal 2003.
Gross profit for the fourth quarter of fiscal 2004 was $1,191,000,
compared to gross profit of $831,000 reported for the comparable
period of the prior year. The Company reported gross profit margin of
36% for the fourth quarter of fiscal 2004, down from 39% in the third
quarter of fiscal 2004, but up slightly from 34% reported in the
fourth quarter of the prior year. The decrease in gross profit margin
from the prior quarter reflects the effect of higher bulk sales of
lower margin Spirulina products in proportion to total sales. The
year-over-year gain resulted from improvement in the Company's
cultivation processes and increased bulk sales of higher margin
natural astaxanthin products, NatuRose and BioAstin.
Operating expenses for the fourth quarter of fiscal 2004 decreased
to $736,000, or 22% of sales. This is a decrease from both the third
quarter of fiscal 2004 ($892,000 or 29% of sales) and the comparable
prior year period ($1,053,000 or 43% of sales). The combined effect of
increased sales and lower operating expenses resulted in income from
operations of $455,000 for the fourth quarter of fiscal 2004, up from
$292,000 in the third quarter of fiscal 2004 and contrasting with the
loss from operations of $222,000 recorded for the fourth quarter of
the prior year period.
"We are extremely pleased with the Company's profitability for the
quarter and year," said Gerald R. Cysewski, Ph.D., Chairman, President
and Chief Executive Officer. "Throughout fiscal 2004, our continued
focus on marketing and productivity has resulted in sequential sales
growth, improved gross margins, increased cash balances and
profitability. As we enter fiscal 2005, our recent track record of
increasing sales on a sequential quarter basis, managing operating
expenses as appropriate for supporting our business initiatives and a
substantially improved balance sheet place us in good stead for future
growth."
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 Tuesday, May
11, 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 May 11, 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.
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CYANOTECH CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Twelve Months
Ended Ended
March 31, March 31,
----------------- -----------------
2004 2003 2004 2003
-------- -------- -------- --------
NET SALES $ 3,290 $ 2,427 $11,582 $ 8,951
COST OF PRODUCT SALES 2,099 1,596 7,642 6,056
-------- -------- -------- --------
Gross profit 1,191 831 3,940 2,895
-------- -------- -------- --------
OPERATING EXPENSES:
Research and development 32 33 149 217
Sales and marketing 278 450 1,239 1,827
General and administrative 426 570 1,823 2,061
-------- -------- -------- --------
Total operating expenses 736 1,053 3,211 4,105
-------- -------- -------- --------
Income (loss) from operations 455 (222) 729 (1,210)
-------- -------- -------- --------
OTHER INCOME (EXPENSE):
Interest income - 10 13 33
Interest expense (36) (79) (286) (418)
Other income (expense), net 1 12 18 (189)
-------- -------- -------- --------
Total other expense (35) (57) (255) (574)
-------- -------- -------- --------
Income (loss) before income
taxes 420 (279) 474 (1,784)
INCOME TAX BENEFIT (EXPENSE) 21 9 (75) 9
-------- -------- -------- --------
NET INCOME (LOSS) $ 441 $ (270) $ 399 $(1,775)
======== ======== ======== ========
NET INCOME (LOSS) PER SHARE
Basic $ 0.02 $ (0.01) $ 0.02 $ (0.10)
======== ======== ======== ========
Diluted $ 0.02 $ (0.01) $ 0.02 $ (0.10)
======== ======== ======== ========
SHARES USED IN CALCULATION OF NET
INCOME (LOSS) PER SHARE:
Basic 20,470 18,317 18,971 17,840
======== ======== ======== ========
Diluted 20,809 18,317 19,111 17,840
======== ======== ======== ========
COMPREHENSIVE INCOME (LOSS):
Net income (loss) $ 441 $ 270 $ 399 $(1,775)
Other comprehensive income
(loss) 5 (9) 33 (1)
-------- -------- -------- --------
$ 446 $ (279) $ 432 $(1,776)
======== ======== ======== ========
CYANOTECH CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands except per share amounts)
(Unaudited)
March 31, March 31,
2004 2003
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 2,531 $ 579
Accounts receivable, net 2,229 1,839
Refundable income taxes 11 9
Inventories 1,099 1,400
Prepaid expenses and other 37 40
--------- ---------
Total current assets 5,907 3,867
Equipment and leasehold improvements, net 11,844 12,777
Other assets 606 838
--------- ---------
Total assets $ 18,357 $ 17,482
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 346 $ 323
Accounts payable 874 803
Accrued expenses 604 389
--------- ---------
Total current liabilities 1,824 1,515
Long-term debt, excluding current maturities 2,093 3,694
--------- ---------
Total liabilities 3,917 5,209
--------- ---------
Stockholders' equity:
Common Stock of $0.005 par value, shares
authorized 25,000,000; shares issued and
outstanding 20,714,246 at March 31, 2004 and
18,316,701 at March 31, 2003 104 92
Additional paid-in capital 27,141 25,418
Accumulated other comprehensive income (loss) -
foreign currency translation adjustments 30 (3)
Accumulated deficit (12,835) (13,234)
--------- ---------
Total stockholders' equity 14,440 12,273
--------- ---------
Total liabilities and stockholders' equity $ 18,357 $ 17,482
========= =========
