The company’s sales were driven by a strong performance in the non-infant formula markets. Total product sales climbed to $88.2 million and net income increased 20% to $11 million for the quarter.
Sales of life’sDHA to non-infant formula markets grew 18% for the quarter as many of Martek’s partners launched products containing the company’s proprietary DHA blend. Wal-Mart launched a line of DHA dietary supplements under the Spring Valley brand, while The Coca Cola Co. rolled out a Blueberry Pom single-serve beverage under its Minute Maid brand. Non-infant formula sales fell just short of $10 million for the quarter, representing about 10% of Martek’s second quarter business. Infant formula sales, which represent about 89% of the business, backtracked 1% to $77.4 million during the second quarter.
Martek announced a number of other noteworthy partnerships and happenings that promise to drive growth during the latter half of the year and into 2010. The company signed exclusive DHA and ARA supply agreements with Rice Field Corp. and Lactalis Nutrition Sante that will allow Martek to further penetrate the infant formula markets in China, France and Algeria. Martek also entered into a multi-year exclusive food and beverage supply agreement with Ragasa, one of Mexico’s largest providers of raw and refined oil products. Ragasa will launch a new cooking oil with the life’s DHA logo featured on the packaging. In a departure from the food and supplement supply markets, the company also announced plans to manufacture shikimic acid, which is a starting material used to produce an anti-viral flu drug. Martek expects shikimic acid sales to total approximately $4.5 million during the latter half of 2009 and first half of 2010, according to a company release.
Martek has forecasted total 2009 revenues to come in between $350 and $355 million, which is in line with the 2008 total of $352 million. The company stayed conservative with its forecast because it expects infant formula sales to slow over the next two quarters as retailers and manufacturers destock their inventory. The outlook for 2010 is bright, however, as Martek has forecasted positive infant formula revenue growth due to strong demand for formula products containing ARA and DHA. “I believe our growing non-infant formula business coupled with an expected resumption in growth in our infant formula business in 2010 will lay a solid foundation for 2010," said CEO Steve Dubin in a prepared statement.
Shares of Martek stock were trading at $20.97 as of June 9. For more on Martek Biosciences and the raw material & ingredient supply market, visit the NBJ Website and download a free sample issue.