KAILUA KONA, Hawaii, Feb 2, 2004 (BUSINESS WIRE) -- Cyanotech Corporation (Nasdaq:CYAN), a world leader in producing high-value natural products from microalgae, today announced financial results for the third quarter of its fiscal year 2004, ended December 31, 2003.
For the third quarter of fiscal 2004 the Company reported net income of $109,000, or $0.01 per diluted share, on sales of $3,024,000, compared to a net loss of $180,000, or ($0.01) per diluted share, for the comparable prior year period. The net sales for the quarter ended December 31, 2003 represent an increase of 6% from $2,840,000 recorded for the prior quarter and a year-over-year increase of 22% from $2,474,000 recorded for the comparable prior year period.
The Company achieved a gross profit margin of 39% for the quarter ended December 31, 2003, up from 30% in the prior quarter and 29% for the comparable prior year period. The improvement in gross profit margin from the prior quarter resulted from the effects of improvements in the Company's cultivation processes, with the year-over-year improvement due primarily to increased bulk sales of higher margin natural astaxanthin products, NatuRose(R) and BioAstin(R). During the third quarter, operating expenses remained at 29% of sales, increasing by $63,000 from the expense level reported for the prior quarter. Improved gross profits, higher sales and a consistent level of operating expenses resulted in operating income of $292,000 for the third quarter of fiscal 2004, up from $32,000 in the prior quarter and contrasting with the loss from operations of $115,000 recorded for the comparable prior year period.
Net sales for the first nine months of fiscal 2004 were $8,292,000, an increase of 27% from $6,524,000 recorded for the comparable prior year period. The growth in revenues resulted from increased bulk sales of the Company's natural astaxanthin products. For the first nine months of fiscal 2004, the Company reported a net loss of $42,000, or ($0.00) per diluted share, compared to the net loss of $1,505,000, or ($0.09) per diluted share, reported for the comparable period of the prior fiscal year.
The Company enters the final quarter of fiscal 2004 with working capital of $3,141,000 and a cash and cash equivalent balance of $1,517,000. This is in contrast to working capital of $2,352,000, and a cash and cash equivalent balance of $579,000 reported at the beginning of the current fiscal year. Furthermore, the voluntary conversion of a $1,250,000 convertible debenture to common stock in December 2003 has reduced long-term liabilities and increased net equity.
"We are extremely pleased by our return to profitability this quarter," said Gerald R. Cysewski, Ph.D., Chairman, President and Chief Executive Officer. "Our focus on all-around improvement in our operations has been validated by demonstrating sequential growth in sales, improved gross profit margins, increasing cash balances and profitability. These achievements are the result of hard work and determination of every employee of the Company." Dr. Cysewski added, "We are committed and determined to continue our efforts in sustaining profitability and growth in future periods."
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.