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Cyanotech Reports Financial Results for the Third Quarter and First Nine Months of Fiscal 2020

08:00 EST 11 Feb 2020 | Businesswire
Cyanotech Corporation

Cyanotech Corporation (Nasdaq Capital Market: CYAN), a world leader in microalgae-based, high-value nutrition and health products, announced financial results for the third quarter and first nine months of fiscal year 2020, ended December 31, 2019.

Third Quarter Fiscal 2020

Cyanotech reported net sales of $7,504,000 for the third quarter of fiscal 2020 compared to $10,044,000 for the third quarter of fiscal 2019. Gross profit was $2,877,000, with gross profit margin of 38.3%, compared to gross profit of $4,116,000 and gross profit margin of 41.0%. Operating income was $367,000 compared to $495,000. Net income was $171,000 or $0.03 per diluted share, compared to net income of $288,000 or $0.05 per diluted share.

Commenting on the third quarter fiscal 2020 results (changes shown vs. the third quarter of fiscal 2019), Cyanotech’s Chief Executive Officer, Gerald R. Cysewski, Ph.D., said:

“Though our sales for the third quarter are below last year’s unusual level, on a nine-month basis our sales volume and profit margins appear to be normalizing. With closer attention to costs and business infrastructure, the company has been generating cash and reducing payables. Absent contrary circumstances, we expect the company to be profitable this fiscal year.”

Providing further detail about the fiscal results, Cyanotech’s Chief Financial Officer, Brian B. Orlopp, added:

“Inclement and cool weather this past quarter impacted production which affected our gross margins. We believe our results are best viewed over a longer time frame than any one given quarter to take into account the seasonal variation of our production.”

Nine Months Fiscal 2020

For the first nine months of fiscal 2020 compared to the nine months ended December 31, 2018, net sales were $23,265,000 compared to $24,143,000. Gross profit was $9,615,000, with gross margin of 41.3%, compared to $8,237,000 and 34.1%, respectively. Net income was $266,000 or $0.04 per diluted share, compared to net loss of ($2,123,000) or ($0.37) per diluted share.

Please review the Company’s Form 10-Q for the period ended December 31, 2019 for more detailed information.

— Cyanotech will host a Skype broadcast at 8:00 PM EST on Wednesday, February 12, 2020 to respond to questions about its operating results and other topics of interest. Interested parties are asked to submit questions to questions@cyanotech.com before 12 p.m. (noon) EST on Wednesday, February 12, 2020. The Company will respond only to relevant questions relating to the Company’s third quarter fiscal 2020 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 more than 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 96-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-Q for the third quarter fiscal 2020 ended December 31, 2019, which can be found on the Cyanotech website (www.cyanotech.com) 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

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

(Unaudited)

 

 

December 31,
2019

 

 

March 31,
2019

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash

 

$

1,609

 

 

$

840

 

Accounts receivable, net of allowance for doubtful accounts of $13 at December 31, 2019 and $27 at March 31, 2019

 

 

1,581

 

 

 

1,982

 

Inventories, net

 

 

11,206

 

 

 

11,274

 

Prepaid expenses and other current assets

 

 

424

 

 

 

496

 

Total current assets

 

 

14,820

 

 

 

14,592

 

 

 

 

 

 

 

 

 

 

Equipment and leasehold improvements, net

 

 

13,474

 

 

 

14,752

 

Operating lease right-of-use assets, net

 

 

3,909

 

 

 

 

Other assets

 

 

234

 

 

 

282

 

Total assets

 

$

32,437

 

 

$

29,626

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,700

 

 

$

4,922

 

Accrued expenses

 

 

901

 

 

 

992

 

Customer deposits

 

 

409

 

 

 

626

 

Operating lease obligations, current portion

 

 

311

 

 

 

 

Short-term contract obligation

 

 

38

 

 

 

285

 

Line of credit

 

 

2,000

 

 

 

2,000

 

Current maturities of long-term debt

 

 

700

 

 

 

663

 

Total current liabilities

 

 

7,059

 

 

 

9,488

 

 

 

 

 

 

 

 

 

 

Long-term debt, less current maturities

 

 

6,172

 

 

 

5,172

 

Long-term operating lease obligations

 

 

3,603

 

 

 

 

Other long-term liabilities

 

 

57

 

 

 

57

 

Total liabilities

 

 

16,891

 

 

 

14,717

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock of $0.01 par value, authorized 10,000,000 shares; no shares issued and outstanding

 

 

 

 

 

 

Common stock of $0.02 par value, authorized 50,000,000 shares; issued and outstanding 5,925,717 shares at December 31, 2019 and 5,879,710 shares at March 31, 2019

 

 

118

 

 

 

117

 

Additional paid-in capital

 

 

32,817

 

 

 

32,447

 

Accumulated deficit

 

 

(17,389

)

 

 

(17,655

)

Total stockholders’ equity

 

 

15,546

 

 

 

14,909

 

Total liabilities and stockholders’ equity

 

$

32,437

 

 

$

29,626

 

CYANOTECH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 

 

Three Months Ended
December 31,

 

 

Nine Months Ended
December 31,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

7,504

 

 

$

10,044

 

 

$

23,265

 

 

$

24,143

 

Cost of sales

 

 

4,627

 

 

 

5,928

 

 

 

13,650

 

 

 

15,906

 

Gross profit

 

 

2,877

 

 

 

4,116

 

 

 

9,615

 

 

 

8,237

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

958

 

 

 

1,337

 

 

 

4,146

 

 

 

4,190

 

Sales and marketing

 

 

1,406

 

 

 

2,068

 

 

 

4,157

 

 

 

5,088

 

Research and development

 

 

146

 

 

 

216

 

 

 

487

 

 

 

635

 

Total operating expenses

 

 

2,510

 

 

 

3,621

 

 

 

8,790

 

 

 

9,913

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

 

367

 

 

495

 

 

825

 

 

(1,676

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(164

)

 

 

(134

)

 

 

(530

)

 

 

(414

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

203

 

 

361

 

 

295

 

 

(2,090

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

32

 

 

73

 

 

29

 

 

33

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

171

 

$

288

 

$

266

 

$

(2,123

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.03

 

$

0.05

 

$

0.04

 

$

(0.37

)

Diluted

 

$

0.03

 

$

0.05

 

$

0.04

 

$

(0.37

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in calculation of net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

5,957

 

 

 

5,836

 

 

 

5,946

 

 

 

5,809

 

Diluted

 

 

5,962

 

 

 

5,862

 

 

 

5,949

 

 

 

5,809

 

 

Bruce Russell
(310) 346-6131
brussell@cyanotech.com

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