KAILUA KONA, Hawaii, Oct 30, 2003 (BUSINESS WIRE) -- Cyanotech Corporation (Nasdaq:CYAN), a world leader in producing high-value natural products from microalgae, today announced financial results for the second quarter of fiscal year 2004, ended September 30, 2003, demonstrating continuing improvement from the prior quarter's results.
For the second quarter of fiscal 2004, net sales were $2,840,000, a 17% increase from the $2,428,000 recorded for the prior quarter and a 41% increase from the $2,018,000 recorded for the comparable quarter of the prior fiscal year. The increase in sales, quarter to quarter, was due primarily to increased bulk sales of the Company's natural astaxanthin products, NatuRose(R) and BioAstin(R), and higher sales of packaged consumer products. The growth in natural astaxanthin product sales was especially evident in the Company's subsidiary in Japan, with a 91% increase in sales over the prior quarter. For the first six months of fiscal 2004, net sales were $5,268,000, an increase of 30% from the $4,050,000 recorded for the comparable period of fiscal 2003. The Company's gross profit margin percentage for the quarter ended September 30, 2003 was 30%, a slight increase over both the prior quarter and the comparable quarter of the prior fiscal year.
During the quarter ended September 30, 2003, operating expenses increased by $75,000 over the previous quarter amount; however, compared to the three months ended September 30, 2002, operating expenses for the current fiscal quarter decreased by $173,000. Operating expenses for the first six months of fiscal 2004 decreased by $643,000 from the comparable period of the prior fiscal year. For the quarter ended September 30, 2003, the Company recorded income from operations of $32,000 in contrast to the loss from operations of $434,000 in the comparable prior fiscal year period.
Net loss for the quarter was $10,000, or ($0.00) per diluted share, an improvement over the net loss of $141,000, or ($0.01) per diluted share, reported for the prior quarter, and the net loss of $540,000, or ($0.03) per diluted share, reported for the comparable quarter of the prior fiscal year. On a fiscal year-to-date basis, the net loss for the first six months of fiscal 2004 amounted to $151,000 or ($0.01) per diluted share compared to a net loss of $1,325,000, or ($0.08) per diluted share reported for the comparable period of the prior fiscal year.
Cash balances at September 30, 2003 were $1,193,000, up from $681,000 and $579,000 reported at June 30 and March 31, 2003, respectively. Cash generated from operations during the current second quarter increased $155,000 over the previous quarter results. The Company's increased cash balances, offset in part by higher current liabilities, resulted in an improvement in working capital of $485,000 during the second quarter of fiscal 2004.
"Our increased sales for the quarter ended September 30, 2003, combined with our management of costs, demonstrate Cyanotech's continuing focus on achieving profitability," said Gerald R. Cysewski, Ph.D., Chairman, President and Chief Executive Officer. Elaborating on the Company's increased sales, Dr. Cysewski commented, "As the first manufacturer to commercialize natural astaxanthin from microalgae, we are pleased with the increased growth in sales of our NatuRose products for the animal nutrition market and our BioAstin products for the human nutrition market. We continue to see strong demand for our NatuRose products in Japan and are also experiencing increased sales of our BioAstin products in the United States and Europe."
Dr. Cysewski noted that Cyanotech's Quality Management System has been granted registration under the new ISO 9001:2000 standard, well in advance of the December 31, 2003 deadline, reaffirming the Company's commitment to quality. "We are justifiably proud of this achievement. Certification under the new ISO standard not only confirms Cyanotech's role as an internationally recognized manufacturer of high-quality natural products, but is a testament to the dedication of our personnel and the continued excellence of the Company's operations and products."
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(R) natural astaxanthin, a powerful antioxidant with expanding applications 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 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.