October 13, 2019
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Cyanotech Reports Financial Results for the First Quarter of Fiscal 2020

KAILUA KONA, Hawaii , August 13 /Businesswire/ - Cyanotech Corporation (Nasdaq Capital Market: CYAN), a world leader in microalgae-based, high-value nutrition and health products, announced financial results for the first quarter of fiscal year 2020, ended June 30, 2019.

First Quarter Fiscal 2020

Cyanotech reported net sales of $8,071,000 for the first quarter of fiscal 2020 compared to $7,145,000 for the first quarter of fiscal 2019. Gross profit was $3,675,000, with gross profit margin of 45.5%, compared to gross profit of $1,836,000 and gross profit margin of 25.7%. Operating income was $49,000 compared to operating loss of ($1,167,000). Net loss was ($133,000) or ($0.02) per diluted share, compared to net loss of ($1,275,000) or ($0.22) per diluted share.

Commenting on the first quarter fiscal 2020 results (changes shown vs. the first quarter of fiscal 2019), Cyanotech’s Chief Executive Officer, Gerald R. Cysewski, Ph.D., said:

“We are pleased that our algae production stabilized and returned to more normal levels in the first quarter, as well as overall sales. Absent what we expect to be mostly non-recurring charges related to severance and associated payments tied to personnel organization, our first quarter pre-tax income would also have normalized at approximately $400,000.”

Providing further detail about the fiscal results, Cyanotech’s Vice President Finance and CFO, Brian Orlopp, added,

“Net sales increase of 13.0% for the current quarter compared to the same period last year was primarily driven by a 76% increase in Spirulina sales, as well as the contribution of third-party contract extraction services. Spirulina sales last year were significantly affected by production issues and the re-inoculation process. Since late last year, productivity levels have returned to normal levels, allowing us to fulfill both bulk and Nutrex consumer product orders. These increases were partially offset by a 10.7% decrease in Astaxanthin sales, primarily due to a reduction in sales to one of our major customers.”

“Gross profit as a percent of net sales increased by 19.8 percentage points compared to the same period last year, primarily due to improvements in production for both Spirulina and Astaxanthin.”

“Operating expenses increased $0.6 million for the current quarter compared to the same period last year, primarily due to increased general and administrative expenses related to personnel organization.”

Trailing 12 Months

For the trailing 12 months ended June 30, 2019 compared to the trailing 12 months ended June 30, 2018, net sales were $31,128,000 compared to $32,451,000. Gross profit was $12,304,000, with gross profit margin of 39.5%, compared to $11,604,000 and 35.8%. Net loss was ($2,454,000) or ($0.42) per diluted share, compared to net loss of ($751,000) or ($0.13) per diluted share.

Please review the Company’s Form 10-Q for the period ended June 30, 2019 for more detailed information.

— Cyanotech will host a Skype broadcast at 8:00 PM EDT on Wednesday, August 14, 2019 to respond to questions about its operating results and other topics of interest. Interested parties are asked to submit questions to questions@cyanotech.com before 12 p.m. EDT on Wednesday, August 14, 2019. The Company will respond only to relevant questions relating to the Company’s first quarter fiscal 2020 financial performance and will not be accepting any questions or comments during the broadcast.

To join the broadcast, please browse http://cyanotech.com/meet approximately five minutes prior to the start time.

About Cyanotech — Cyanotech Corporation, a world leader in microalgae technology for more than 30 years, produces BioAstin® Hawaiian Astaxanthin® and Hawaiian Spirulina Pacifica®. These all-natural, dietary ingredients and supplements leverage our experience and reputation for quality, building nutritional brands which promote health and well-being. The Company’s mission is to fulfill the promise of whole health through Hawaiian microalgae. Cyanotech’s BioAstin® offers superior antioxidant activity which supports skin, eye and joint health, as well as recovery from exercise*. Cyanotech's Spirulina products offer nutrition that supports cardiovascular health and immunity.* All Cyanotech products are produced from microalgae grown at our 96-acre facility in Kona, Hawaii using patented and proprietary technology and are Generally Recognized as Safe (GRAS) for use in food products. Cyanotech sells its products direct to consumers at retail locations in the United States and online at www.nutrex-hawaii.com and also distributes to dietary supplement, nutraceutical and cosmeceutical manufacturers and marketers. The Company is regulated by the FDA. Visit www.cyanotech.com for more information.

*These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure or prevent any disease.

“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 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 first quarter fiscal 2020 ended June 30, 2019, which can be found on the Cyanotech website (www.cyanotech.com) under Investors>Investor Filings upon filing. As such the following Financial Tables are provided only as a guide and other factors are more fully detailed in the Company’s annual Form 10-K filings with the Securities and Exchange Commission.

CYANOTECH CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

(Unaudited)

 

June 30,

2019

 

March 31,

2019

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash

$

 

1,055

 

$

 

840

 

Accounts receivable, net of allowance for doubtful accounts of $27 at June 30,

2019 and $27 at March 31, 2019

 

1,794

 

 

1,982

 

Inventories, net

 

11,570

 

 

11,274

 

Prepaid expenses and other current assets

 

495

 

 

496

 

Total current assets

 

14,914

 

 

14,592

 

 

 

 

 

 

 

 

Equipment and leasehold improvements, net

 

14,309

 

 

14,752

 

Operating lease right-of-use assets

 

4,056

 

 

 

Other assets

 

234

 

 

282

 

Total assets

$

 

33,513

 

$

 

29,626

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

$

 

3,742

 

$

 

4,922

 

Accrued expenses

 

1,112

 

 

992

 

Customer deposits

 

165

 

 

626

 

Operating lease obligations

 

290

 

 

 

Short-term contract obligation

 

101

 

 

285

 

Line of credit

 

2,000

 

 

2,000

 

Current maturities of long-term debt

 

667

 

 

663

 

Total current liabilities

 

8,077

 

 

9,488

 

 

 

 

 

 

 

 

Long-term debt, less current maturities

 

6,509

 

 

5,172

 

Long-term operating lease obligations

 

3,766

 

 

 

Other long-term liabilities

 

57

 

 

57

 

Total liabilities

 

18,409

 

 

14,717

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock of $0.01 par value, authorized 10,000,000 shares; no shares

issued and outstanding

 

 

 

 

Common stock of $0.02 par value, authorized 50,000,000 shares; issued and

outstanding 5,889,582 shares at June 30, 2019 and 5,879,710 shares at March

31, 2019

 

118

 

 

117

 

Additional paid-in capital

 

32,774

 

 

32,447

 

Accumulated deficit

 

(17,788

)

 

(17,655

)

Total stockholders’ equity

 

15,104

 

 

14,909

 

Total liabilities and stockholders’ equity

$

 

33,513

 

$

 

29,626

 

CYANOTECH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 

 

Three Months Ended

June 30,

 

2019

2018

 

 

 

 

 

 

 

Net sales

$

 

8,071

 

$

 

7,145

 

Cost of sales

 

4,396

 

 

5,309

 

Gross profit

 

3,675

 

 

1,836

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

General and administrative

 

2,031

 

 

1,372

 

Sales and marketing

 

1,408

 

 

1,423

 

Research and development

 

187

 

 

208

 

Total operating expenses

 

3,626

 

 

3,003

 

 

 

 

 

 

 

 

Income (loss) from operations

 

49

 

(1,167

)

 

 

 

 

 

 

 

Interest expense, net

 

185

 

130

 

 

 

 

 

 

 

Loss before income taxes

 

(136

)

 

(1,297

)

 

 

 

 

 

 

 

Income tax benefit

 

(3

)

 

(22

)

 

 

 

 

 

 

 

Net loss

$

 

(133

)

$

 

(1,275

)

 

 

 

 

 

 

 

Net loss per share:

 

 

 

 

 

 

Basic

$

 

(0.02

)

$

 

(0.22

)

Diluted

$

 

(0.02

)

$

 

(0.22

)

 

 

 

 

 

 

 

Shares used in calculation of net loss per share:

 

 

 

 

 

 

Basic

 

5,919

 

 

5,785

 

Diluted

STORY TAGS: Biotechnology, Men, Alternative Medicine, Health, Consumer, Other Health, General Health, Women, Fitness & Nutrition, Seniors, United States, North America, Hawaii, Webcast, Conference Call, Earnings,

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