KAILUA KONA, Hawaii--(BUSINESS WIRE)--Aug. 7, 2003--Cyanotech Corporation (Nasdaq:CYAN), a world leader in producing high-value natural products from microalgae, today announced financial results for the first quarter of fiscal year 2004, ended June 30, 2003.
For the first quarter of fiscal 2004, net sales were $2,428,000, an increase of $396,000 or 19% compared to $2,032,000 reported for the comparable period of fiscal 2003. The increase in net sales was due to higher sales of all bulk products: Spirulina Pacifica(R), NatuRose(R) and BioAstin(R).
Gross profit for the quarter ended June 30, 2003 was $704,000, with gross profit margin amounting to 29% compared to gross profit of $785,000 and gross profit margin of 39% in the comparable prior year period. This was offset in large part by decreased operating expenses totaling $754,000 compared to operating expenses of $1,224,000 reported for the comparable prior year period. As a result, the Company recorded a loss from operations of $50,000 for the quarter compared to $439,000 reported for the prior fiscal year.
Foreign sales accounted for 56% of total sales during the quarter ended June 30, 2003 compared to 52% reported for the comparable period of the prior fiscal year. For the quarter ended June 30, 2003, sales to the Company's largest customer, Spirulina International B.V., were comparable in amount to that of the comparable prior year period. However, due to increased overall sales, this customer accounted for 16% of net sales for the first quarter of fiscal 2004 compared to 21% for the comparable prior fiscal year period.
The Company reported a net loss for the quarter ended June 30, 2003 of $141,000, or ($0.01) per diluted share, compared to the net loss of $785,000, or ($0.05) per diluted share for the comparable period of the prior fiscal year. The net loss for the quarter ended June 30, 2003 includes depreciation expense of $335,000, net interest expense of $80,000 and an income tax benefit of $18,000. This resulted in earnings before interest, taxes and depreciation (EBITDA) of $256,000 compared to an EBITDA loss of $347,000 for the comparable prior year period. The EBITDA loss for fiscal 2003 included a net loss of $785,000, depreciation expense of $326,000 and net interest expense of $112,000.
"This is the third consecutive quarter with sales over $2.4 million, which indicates to us that the market for our Company's products is improving," said Gerald R. Cysewski, Ph.D., Chairman, President and Chief Executive Officer. "Our customers' demand for natural astaxanthin products continued with higher sales of both NatuRose and BioAstin for the quarter. We continue to focus on refining our cultivation systems to increase both our short and long-term productivity and to keep costs in line with projected demand. This effort is aimed at increasing finished goods inventory of high-demand products to better serve our present and future customers."
Dr. Cysewski noted that sales of NatuRose natural astaxanthin through Cyanotech Japan YK have improved steadily since this subsidiary was established in January 2002. NatuRose is used as a feed additive for sea bream or "Tai" in Japan. "While not as well-known as the salmon industry, this market holds tremendous potential for our natural astaxanthin product and has become a significant part of our business in a relatively short period of time."
The Company's processes for developing high-quality products from microalgae were re-affirmed during the first quarter as it was recently notified that its operation received certification under the new ISO 2002 regulations. "We were targeting December 2003 as the date for compliance with this new standard," said Dr. Cysewski. "Having been an ISO-9000 certified company since 1995, we believe this achievement is tangible proof to our customers of our commitment to quality."
Cyanotech Corporation, a world leader in microalgae 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(R) natural astaxanthin, a powerful antioxidant with expanding application as a human nutraceutical; NatuRose(R) natural astaxanthin for the aquaculture and animal feed industries; Spirulina Pacifica(R), 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 worldwide in over 30 countries. Corporate and product information is available at www.cyanotech.com.
SAFE HARBOR - 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.