Cyanotech Corporation (Nasdaq Capital Market: CYAN), a world leader in
microalgae-based, high-value nutrition and health products, announced
financial results for the fourth quarter and fiscal year 2018, ended
March 31, 2018.
Fiscal Year 2018
For fiscal year 2018 compared to fiscal year 2017, net sales improved to
$34,115,000 compared to $32,042,000. Gross profit increased to
$13,371,000, with gross profit margin of 39.2%, compared to gross profit
of $12,224,000 and gross profit margin of 38.1%. Operating income
improved to $1,414,000 compared to an operating loss of ($682,000). Net
income was $1,025,000 or $0.18 per diluted share, compared to net loss
of ($1,215,000) or ($0.21) per diluted share.
Commenting on the fiscal year 2018 results (changes shown vs. fiscal
year 2017), Cyanotech’s Chief Executive Officer, Mawae Morton, said:
“Cyanotech results for the year continue to reflect our focus on
building our consumer brands, introducing them to a broader consumer
market and maintaining a profitable mix of sales channels. Despite the
Spirulina production issues we experienced in the fourth quarter, this
strategy enabled us to deliver positive top line and bottom line
performance over the past fiscal year.
“The net sales increase of 6.5% was driven by a 13.6% increase in sales
of our packaged Nutrex Hawaii products, offset by a 23.3% decrease in
bulk sales. The increase in packaged sales for both astaxanthin and
spirulina was the result of continued growth in sales through Costco and
Amazon. The bulk sales decrease is primarily from a 29.8% decrease in
bulk spirulina sales, related to production declines we experienced
during the year. Demand for our spirulina remains high.
“Gross profit percent of net sales increased by 1.1 percentage points
compared to fiscal 2017 as a result of a higher mix of higher margin
packaged sales and lower astaxanthin costs. This improvement was net of
$0.8 million of abnormal production costs during fiscal 2018 related to
lower spirulina production. Additional abnormal production costs are
expected to be incurred and expensed in the first quarter of fiscal 2019.
“Operating expenses decreased $0.9 million, or 5.3% of net sales, to
$12.0 million, due to a $1.5 million decrease in legal fees, offset by
an increase in compensation and incentive costs. As a result, net income
was $1.0 million, or 3.0% of net sales, compared to a net loss of $1.2
million, or (3.8%) of net sales, an overall increase of $2.2 million
compared with last year.”
Commenting on production, Gerald R. Cysewski, Ph.D., Cyanotech’s founder
and Chief Scientific Officer, said, “Our unique and intricate
agricultural systems, in which we grow microalgae year-round in open
ponds, require favorable weather conditions and proper control and
balance of nutrients to achieve optimum production.
“Our fourth quarter was significantly impacted by a variety of
unexpected events, which occurred in concert to have an adverse effect
on our production of spirulina. These events included fresh water supply
restriction which lasted several months, and an unusually cool, cloudy
and rainy winter, which lead to the growth of small and difficult to
“In response to these production challenges, at the beginning of April
2018 we undertook a re-inoculation of our spirulina ponds which we
believe will allow us to correct the nutrient levels and stabilize
production. There was no spirulina production during the re-inoculation
process, which was completed in mid-May 2018.”
Fourth Quarter 2018
For the fourth quarter of fiscal 2018 compared to the fourth quarter of
fiscal 2017, net sales were $8,101,000 compared to $7,253,000. Gross
profit was $1,908,000, with gross profit margin of 23.6%, compared to
$2,661,000 and 36.7%. Operating loss was ($935,000) compared to
($146,000). Net loss was ($1,058,000) or ($0.18) per diluted share,
compared to net loss of ($274,000) or ($0.05) per diluted share.
Please review the Company’s Form 10-K for the fiscal year ended March
31, 2018 for more detailed information.
— Cyanotech will host a Skype broadcast at 5 p.m. EDT on
Wednesday, June 20 to respond to questions about its operating
results and other topics of interest. Interested parties are asked
to submit questions to firstname.lastname@example.org
before midnight EDT on Monday, June 18. The Company will respond
only to relevant questions relating to the Company’s fourth
quarter and fiscal year 2018 financial performance, and will not
be accepting any questions or comments during the broadcast.
To join the broadcast, please browse http://cyanotech.com/meet
approximately five minutes prior to the start time.
About Cyanotech — Cyanotech Corporation, a world leader in
microalgae technology for over 30 years, produces BioAstin® Hawaiian
Astaxanthin® and Hawaiian Spirulina Pacifica®. These all natural,
dietary ingredients and supplements leverage our experience and
reputation for quality, building nutritional brands which promote health
and well-being. The Company’s mission is to fulfill the promise of whole
health through Hawaiian microalgae. Cyanotech’s BioAstin® offers
superior antioxidant activity which supports skin, eye and joint health,
as well as recovery from exercise*. Cyanotech’s Spirulina products offer
nutrition that supports cardiovascular health and immunity.* All
Cyanotech products are produced from microalgae grown at our 90-acre
facility in Kona, Hawaii using patented and proprietary technology and
are Generally Recognized as Safe (GRAS) for use in food products.
Cyanotech sells its products direct to consumers at retail locations in
the United States and online at www.nutrex-hawaii.com
and also distributes to dietary supplement, nutraceutical and
cosmeceutical manufacturers and marketers. The Company is regulated by
the FDA. Visit www.cyanotech.com
for more information.
*These statements have not been evaluated by the Food and Drug
Administration. This product is not intended to diagnose, treat, cure or
prevent any disease.
“Safe Harbor” Statement under the U.S. Private Securities Litigation
Reform Act of 1995 Besides statements of present fact and historical
fact, this press release may contain forward-looking statements.
Forward-looking statements relate to the future and are subject to
inherent uncertainties, risks and changes in circumstances that are
difficult to predict. Our actual results may differ materially from
those contemplated by forward-looking statements. We caution against
relying on forward-looking statements. Important factors that could
change actual, future results include: changes in sales levels to our
largest customers, weather patterns in Hawaii, production problems,
risks associated with new products, foreign exchange fluctuations, and
availability of financing, as well as national and global political,
economic, business, competitive, market and regulatory conditions. Other
factors are more fully detailed in the Company’s annual Form 10-K
filings with the Securities and Exchange Commission.
Financial Tables Follow: The following tables do not contain
footnotes or other information contained in the Company’s Form 10-K for
the period ended March 31, 2018, which can be found on the Cyanotech
under Investors>Investor Filings upon filing. As such the following
Financial Tables are provided only as a guide and other factors are more
fully detailed in the Company’s annual Form 10-K filings with the
Securities and Exchange Commission.
CYANOTECH CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
CYANOTECH CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended March 31,
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