KAILUA-KONA, Hawaii--(BUSINESS WIRE)--Jan. 23, 2003--Cyanotech Corporation (Nasdaq:CYAN), a world leader in producing high-value natural products from microalgae, today announced financial results for the third quarter and first nine months of fiscal year 2003, ended December 31, 2002.
For the third quarter of fiscal 2003, net sales were $2,474,000 versus $1,916,000 for the third quarter of fiscal 2002. The net loss was $180,000, or ($0.01) per diluted share, compared to a net loss of $937,000, or ($0.05) per diluted share, reported for the third quarter of fiscal 2002.
In the third quarter of fiscal 2003, net sales increased 29% from the prior year quarter results and gross profit margins were 29% compared to 3% in the third quarter of fiscal 2002. The sales increase was due to higher sales of bulk Spirulina products and astaxanthin products, both NatuRose(R) and BioAstin(R). Total net sales for the prior year third quarter included $204,000 of a non-recurring settlement related to product distribution license fees. Excluding this amount, net sales from product shipments increased 45% from the year earlier period. Third quarter fiscal 2003 results include $332,000 of depreciation expense, a non-cash charge, compared to $327,000 of depreciation expense in the third quarter of fiscal 2002.
"Our goal during the third quarter was to return the Company to generating positive operating cash flow. This has been achieved and now our goal is to return the Company to profitability as well," said Gerald R. Cysewski, Ph.D., chairman, president and CEO. "Our expectation is that the apparent demand for our products will continue to increase and allow us to achieve this goal in the near future."
Sales to Cyanotech's largest customer, Spirulina International BV, accounted for 17% of total net sales during the third quarter of fiscal 2003, compared to less than 10% in the comparable quarter ended December 31, 2001. Spirulina International is continuing its launch of a BioAstin-based product in Europe and South Africa, and is further developing the market for Spirulina Pacifica(R) in those areas.
Increased demand for Cyanotech's NatuRose product through its wholly-owned subsidiary in Japan, Cyanotech Japan YK, continued during the third quarter of fiscal 2003, accounting for 12% of total net sales for the quarter. Cyanotech expects such NatuRose sales to be lower in the fourth quarter of fiscal 2003 due to seasonal conditions in the Japanese aquaculture industry, but to increase again in the first quarter of fiscal 2004.
Operating expenses for the third quarter of fiscal 2003 of $826,000 decreased 18% from the second quarter of fiscal 2003 of $1,002,000, or approximately $176,000, primarily as a result of cost reduction actions that were implemented in September 2002.
For the first nine months of fiscal 2003, net sales were $6,524,000 versus $6,180,000 for the first nine months of fiscal 2002. The net loss was $1,505,000, or ($0.09) per diluted share, compared to a net loss of $1,859,000, or ($0.11) per diluted share reported for the first nine months of fiscal 2002.
"We are pleased with the continuing growth in demand for our astaxanthin products -- BioAstin in the US and Europe and NatuRose in Japan," noted Dr. Cysewski. "Our work with industry-leading cosmetic manufacturers, pharmaceutical companies offering branded nutraceuticals, direct marketing companies and natural food sector supplement makers to integrate our natural astaxanthin products into their nutraceutical and cosmetic formulations is starting to pay off."
Besides the previously reported new product introductions by Twinlab and Sea & Ski containing natural astaxanthin, Cyanotech also has begun delivering astaxanthin to the Rexall Sundown, GNC and Unicity Network divisions of Royal Numico for use in their specialty products.
The company's 30-minute television infomercial for BioAstinXP(R), focused on joint pain relief, was tested again in 10 cities and on national cable between January 11 and January 19, 2003. The results of this test are being analyzed to determine in which market areas the program performed best. Further showings are then planned for those areas that achieved the desired results.
Cyanotech Corporation, the world's 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 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 and BioAstin are sold directly online through both www.nutrex-hawaii.com and www.bioastinxp.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, the public's recognition and perception of nutraceutical products, and other factors more fully detailed in the company's recent quarterly 10-Q and annual 10-K filings with the Securities and Exchange Commission.
WEBCAST -- Cyanotech will hold a conference call on Thursday, January 23, 2003 at 4:30 p.m. Eastern time to be broadcast live over the Internet. It can be accessed by all interested parties by linking from www.cyanotech.com or through the Investor Broadcast Network's Vcall Web site at www.vcall.com. To listen to the live call, please go to the Web site at least fifteen minutes prior to the start of the call to register, download, and install any necessary audio software. For those who are not able to listen to the live broadcast, a replay will be available shortly after the call on the Vcall site and for 90 days thereafter.