Company Reports Net Income of $399,000 for the Fiscal Year Ended March 31, 2004
KAILUA KONA, Hawaii, May 11, 2004 (BUSINESS WIRE) -- Cyanotech Corporation (Nasdaq:CYAN), a world leader in producing high-value natural products from microalgae, today announced financial results for the fourth quarter and fiscal year ended March 31, 2004.
Financial Results -- Fiscal 2004
For the 12 months ended March 31, 2004 (Fiscal 2004), the Company reported net income of $399,000, or $0.02 per diluted share, contrasting with the net loss of $1,775,000, or ($0.10) per diluted share reported for the prior fiscal year. Net sales for fiscal 2004 were $11,582,000, an increase of 29% from the prior fiscal year's sales of $8,951,000. Foreign sales accounted for 53% of total sales for fiscal 2004, compared to 54% reported for fiscal 2003. The growth in revenues resulted from increased bulk sales of the Company's natural astaxanthin products: NatuRose(R) and BioAstin(R).
For fiscal 2004, gross profit was $3,940,000, compared to $2,895,000 reported for fiscal 2003. The Company recorded a gross profit margin of 34% for fiscal 2004, up slightly from gross profit margin of 32% reported for fiscal 2003. This improvement in gross profit and gross profit margin was due to increased bulk sales of higher margin NatuRose and BioAstin products and to improvement in product cultivation and processing. During fiscal 2004, operating expenses decreased by 22% to $3,211,000 from the $4,105,000 reported for fiscal 2003. Increased sales and a reduced level of operating expenses resulted in operating income of $729,000 for fiscal 2004, in contrast to the loss from operations of $1,210,000 reported for the prior fiscal year.
The Company ended fiscal 2004 with working capital of $4,083,000 and cash and cash equivalents of $2,531,000, compared to working capital of $2,352,000, and cash and cash equivalents of $579,000 reported at the beginning of the fiscal year.
Financial Results -- Fourth Quarter FY 2004
For the fourth quarter of fiscal 2004, the Company reported net income of $441,000, or $0.02 per diluted share, on sales of $3,290,000, an improvement from net income of $109,000 or $0.01 per diluted share in the third quarter of fiscal 2004 and contrasting with the net loss of $270,000 or ($0.01) per diluted share reported for the comparable prior year period. Net sales for the fourth quarter of fiscal 2004 increased by 9% from $3,024,000 recorded for the third quarter of fiscal 2004 and by 36% from $2,427,000 recorded for the fourth quarter of the prior fiscal year. Foreign sales accounted for 53% of total sales in the fourth quarter of fiscal 2004, compared to 52% reported for the comparable period of fiscal 2003.
Gross profit for the fourth quarter of fiscal 2004 was $1,191,000, compared to gross profit of $831,000 reported for the comparable period of the prior year. The Company reported gross profit margin of 36% for the fourth quarter of fiscal 2004, down from 39% in the third quarter of fiscal 2004, but up slightly from 34% reported in the fourth quarter of the prior year. The decrease in gross profit margin from the prior quarter reflects the effect of higher bulk sales of lower margin Spirulina products in proportion to total sales. The year-over-year gain resulted from improvement in the Company's cultivation processes and increased bulk sales of higher margin natural astaxanthin products, NatuRose and BioAstin.
Operating expenses for the fourth quarter of fiscal 2004 decreased to $736,000, or 22% of sales. This is a decrease from both the third quarter of fiscal 2004 ($892,000 or 29% of sales) and the comparable prior year period ($1,053,000 or 43% of sales). The combined effect of increased sales and lower operating expenses resulted in income from operations of $455,000 for the fourth quarter of fiscal 2004, up from $292,000 in the third quarter of fiscal 2004 and contrasting with the loss from operations of $222,000 recorded for the fourth quarter of the prior year period.
'We are extremely pleased with the Company's profitability for the quarter and year,'said Gerald R. Cysewski, Ph.D., Chairman, President and Chief Executive Officer. 'Throughout fiscal 2004, our continued focus on marketing and productivity has resulted in sequential sales growth, improved gross margins, increased cash balances and profitability. As we enter fiscal 2005, our recent track record of increasing sales on a sequential quarter basis, managing operating expenses as appropriate for supporting our business initiatives and a substantially improved balance sheet place us in good stead for future growth.'
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, 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.