Cyanotech reports financial results

Kona, Hawaii-based microalgae nutrition company Cyanotech has announced financial results for the second quarter and first six months of fiscal year 2015, ended September 30, 2014. For the second quarter of fiscal 2015 compared to the second quarter of fiscal 2014, net sales were $8,684,000 compared to $7,299,000, an increase of 19%.

Gross profit was $4,276,000, with gross profit margin of 49%, compared to gross profit of $2,993,000 and gross profit margin of 41%. Net income was $188,000 or $0.03 per diluted share, compared to net income of $106,000 or $0.02 per diluted share.

Commenting on the second quarter fiscal 2015 results (changes shown vs. second quarter fiscal 2014), Brent Bailey, Cyanotech president and CEO, noted, “Net sales reached a record $8,684,000 (+19%) in the 2nd Quarter. Our Nutrex packaged consumer products business (+47%) was the primary driver of this growth. The bulk Spirulina business (+32%) also had a strong quarter. Second quarter net sales growth of our Nutrex business, by channel, was:

  • Nutrex Mainland: +54%
  • Nutrex Hawaii: +46%
  • Nutrex Direct (online): +82%
  • Nutrex International: -3%

“The modest decline in the Nutrex International business was related to timing of orders. Our BioAstin retail market share of Astaxanthin in the US natural products channel was 58% (+5 pts.). Nutrex Spirulina market share was 52% (+2 pts.).

“Operating income for the quarter was $536,000, a healthy +49% increase versus prior year. The growth was driven by a 49% (+8 pts.) gross margin resulting from strong growth in the Nutrex business and an increase in extraction yields. This was partially offset by an increase of $761,000 in legal costs, including final preparation of expert reports, rebuttal of plaintiff’s expert reports and preparation of several counter claims related to ongoing litigation.

Excluding these legal costs, operating income for the quarter was $1,417,000, 16.3% of net sales, and +$938,000 versus prior year. In addition, sales and marketing expenses increased by $282,000, as planned, to support the San Diego test market and the strong Nutrex revenue growth. Excluding these legal costs, pretax earnings for the quarter were $1.4 million compared to $0.5 million for the same period last year, and basic earnings per share were $0.25 per share in the current quarter compared to $0.08 for the same period last year. Please review the Company’s 10Q for detailed information.

“After three consecutive sub-par quarters, Astaxanthin production in the second quarter was up +16% versus prior year including the second best month in Cyanotech history in September. This improvement was driven by greater strain productivity, increased algae density and several additional process changes. All are expected to significantly increase our Astaxanthin production for the foreseeable future.”

For the first six months ended September 30, 2014 compared to the first six months ended September 30, 2013, net sales were $16,126,000 compared to $14,208,000 an increase of 14%. Gross profit was $7,244,000, with gross profit margin of 45%, compared to gross profit of $5,845,000 and gross profit margin of 40%. Net loss was ($225,000) or ($0.04) per diluted share, compared to net income of $136,000 or $0.02 per diluted share.

 

Photo: Cultivating astaxanthin at Cyanotech, in Hawaii

View original article at: Cyanotech reports financial results

Reprinted with permission by Algae Industry Magazine

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