[USA] Cyanotech Corporation (Nasdaq Capital Market: CYAN), a world leader in microalgae-based, high-value nutrition and health products, today announced financial results for the first quarter of fiscal year 2017, ended June 30, 2016.
First Quarter 2017
For the first quarter of fiscal year 2017 compared to the first quarter of fiscal year 2016, net sales were $7,322,000 compared to $7,594,000, a decrease of 3.6%. Gross profit was $2,821,000, with gross profit margin of 38.5%, compared to gross profit of $2,924,000 and gross profit margin of 38.5%. Operating loss was ($610,000) compared to operating loss of ($195,000). Net loss was ($691,000) or ($0.12) per diluted share, compared to net loss of ($105,000) or ($0.02) per diluted share. Contributing to the loss are legal fees related to various ongoing legal matters which totaled $580,000 for the first quarter of fiscal 2017, compared to $42,000 for the first quarter of fiscal 2016. Please review the Company’s Form 10-Q for more detailed information.
Commenting on the first quarter of fiscal 2017 results (changes shown vs. the first quarter of fiscal 2016), Gerry Cysewski, Ph.D., Cyanotech’s Interim President and CEO, noted:
“Net sales declined 3.6% for the quarter, driven by a 14% decrease in our packaged products, offset by a 39% increase in bulk sales. The decline in sales of packaged product compared to the same period last year is the result of limits on the level of discounts offered in low margin channels in the current quarter. This change, which resulted in a 19% decrease in astaxanthin sales and flat spirulina sales, is expected to improve profitability in the long run.
“Sales of our bulk products increased 39%, made up of a 43% increase in spirulina sales and a 25% increase in astaxanthin sales. The increase in bulk sales was driven by increased demand from our international customers, coupled with increased levels of astaxanthin inventory available for sale.
“Our strategy continues to focus on growing the market for higher margin, branded consumer products by emphasizing the higher nutritional content of our Hawaiian spirulina and the benefits of our natural astaxanthin over synthetics. Both are the #1 selling products in their respective categories in the natural products channel.
“During the first quarter, BioAstin sales expanded into an additional 32 warehouse stores in Costco’s Texas region and now is available in 195 Costco warehouses, or roughly 40% of their domestic total.
“We also began extracting 100 percent of our astaxanthin product in our new onsite extraction facility, saving considerable costs and time compared to our earlier process of sending biomass to the mainland US and to New Zealand for extraction.”
Trailing 12 Months ended June 30, 2016
For the trailing 12 months ended June 30, 2016 compared to the trailing 12 months ended June 30, 2015, net sales were $31,568,000 compared to $33,779,000, a decrease of 6.5%. Gross profit was $11,763,000, with gross profit margin of 37.3%, compared to gross profit of $14,331,000 and gross profit margin of 42.4%. Pretax loss was ($1,590,000) compared to pretax income of $1,083,000, and net loss was ($4,981,000) or ($0.89) per diluted share, compared to net income of $252,000 or $0.05 per diluted share.
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