Cyanotech Reports Financial Results For The Fourth Quarter And Fiscal Year 2011

Cyanotech Corporation (Nasdaq Capital Market: CYAN), a world leader in microalgae-based, high-value nutrition and health products, today announced financial results for the fourth quarter and fiscal year 2011, ended March 31, 2011.

Fourth Quarter 2011

For the fourth quarter of fiscal 2011 revenues were $5,218,000 compared to $3,814,000 for the fourth quarter of fiscal 2010. Gross profit was $1,798,000, with gross profit margin of 34%, compared to gross profit of $1,387,000 and gross profit margin of 36%. Net income was $795,000 or $.14 per diluted share, including a non-cash tax benefit of $552,000 due to a reduction in the deferred tax valuation allowance and recording of a net deferred tax asset, compared to net loss of $226,000 or $(0.04) per diluted share last fiscal year. Income before the tax benefit was $216,000 for the fourth quarter of 2011 compared to a loss of $230,000 in 2010.

Fiscal Year 2011

For the fiscal year ended March 31, 2011, revenues were $16,827,000 compared to revenues of $15,742,000 for the year ended March 31, 2010. Gross profit was $6,341,000, with gross profit margin of 38%, compared to gross profit of $6,633,000 and gross profit margin of 42% in fiscal 2010. Net income was $1,730,000 or $.32 per diluted share, including a non-cash tax benefit of $552,000 due to a reduction in the deferred tax valuation allowance and recording of a net deferred tax asset, compared to $1,391,000, or $0.26 per diluted share fiscal year 2010. Income before the income tax benefit for fiscal 2011 was $1,163,000 compared to $1,415,000 in 2010.

Brent Bailey, President and CEO, said, “Cyanotech's business is healthy and vital. Our fourth quarter results were robust, but also were influenced by several factors, which are generally non-recurring:
  • Approximately $800,000 of the increase in net sales was due to the discounted sale of short-dated and non-conforming product as well as opportunistic revenue that we do not expect to repeat
  • These sales negatively impacted gross profit and net income by $366,000
  • Net income increased by $552,000 due to a non-cash tax benefit

Eliminating these non-recurring items still shows a record quarter with 16% net sales growth generated by expanded market awareness of our products, such as from favorable publicity for both Astaxanthin and Spirulina from multiple segments on the popular Dr. Oz Show. Our fiscal 2011 results were similarly influenced by these factors.”

“In addition, we significantly improved our cash position and made substantial progress in reducing our inventory in the fourth quarter,” Bailey continued.

“The foundation is being established to fully capitalize on Cyanotech’s core competence of cultivating and processing microalgae into high-value, high-quality natural products for the human nutrition market. Our brand promise emphasizes the higher nutritional content of Hawaiian spirulina and the benefits of our natural Hawaiian astaxanthin over synthetics. This was also instrumental in our fourth quarter sales growth,” Bailey concluded.

Cash and cash equivalents were $2,062,000 at March 31, 2011 compared to the March 31, 2010 balance of $817,000 and the December 31, 2010 balance of $729,000. Working capital was $6,285,000 at March 31, 2011 compared to $4,942,000 at March 31, 2010 and $5,944,000 at December 31, 2010. Inventory was $3,627,000 on March 31, 2011 compared to $3,933,000 on March 31, 2010 and $4,356,000 on December 31, 2010.

For fiscal 2011, Spirulina sales accounted for 50% of total revenues and natural Astaxanthin sales for 50%. International sales were 42% of total sales.

About CyanotechCyanotech Corporation, a world leader in microalgae technology, produces BioAstin® Natural Astaxanthin and Hawaiian Spirulina Pacifica®—all natural, functional nutrients that leverage our experience and reputation for quality, building nutritional brands which promote health and well being. Cyanotech's Spirulina products offer complete nutrition, and augment energy and immune response. They are FDA reviewed and accepted as Generally Recognized as Safe (GRAS) for use in food products. BioAstin's superior antioxidant activity and ability to support and maintain a natural anti-inflammatory response enhance skin, muscle and joint health. All Cyanotech products are produced from microalgae grown at its 90-acre facility in Kona, Hawaii using patented and proprietary technology. Cyanotech distributes to nutritional supplement, nutraceutical and cosmeceutical manufacturers and marketers in more than 54 countries worldwide. Cyanotech was the first microalgae company in the world to obtain quality management standards ISO 9001:2000 certification and is GMP-certified by the Natural Products Association TM . Visit www.cyanotech.com for more information.

“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 recent Form 10-Q and 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, 2011. As such the following Financial Tables are provided only as a guide and other factors are more fully detailed in the Company’s Form 10-Q and annual Form 10-K filings with the Securities and Exchange Commission.)

CYANOTECH CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

March 31,
         
2011 2010

(in thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents $ 2,062 $ 817

Accounts receivable, net of allowance for doubtful accounts of $58in 2011 and $10 in 2010
2,641 2,064
Inventories, net 3,627 3,933
Deferred tax assets 17
Prepaid expenses and other current assets   134     400  
Total current assets 8,481 7,214
Equipment and leasehold improvements, net 4,557 4,681
Deferred tax assets 535
Other assets   287     253  
Total assets $ 13,860   $ 12,148  
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt $ 204 $ 276
Line of credit 150
Customer deposits 115
Accounts payable 1,054 1,125
Accrued expenses   823     721  
Total current liabilities 2,196 2,272
Long-term debt, excluding current maturities   553     756  
Total liabilities   2,749     3,028  
Commitments and contingencies

Stockholders’ equity:

Common stock of $.02 par value, authorized 7,500,000 shares;issued and outstanding 5,395,168 shares at 2011 and 5,252,572shares at 2010
108 105
Additional paid-in capital 27,803 27,545
Accumulated deficit   (16,800 )   (18,530 )
Total stockholders’ equity   11,111     9,120  
Total liabilities and stockholders’ equity $ 13,860   $ 12,148  
 

CYANOTECH CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

 

Year ended March 31,
             
2011 2010 2009
(in thousands, exceptper share data)
 
Net sales $ 16,827 $ 15,742 $ 13,950
Cost of sales   10,486     9,109     8,438  
Gross profit   6,341     6,633     5,512  
Operating expenses:
General and administrative 2,822 3,311 2,873
Sales and marketing 1,986 1,402 1,125
Research and development 282 264 206
Loss on disposal of equipment and leasehold improvements   22     155      
Total operating expense   5,112     5,132     4,204  
Income from operations   1,229     1,501     1,308  
Other income (expense):
Interest expense, net (70 ) (109 ) (154 )
Other income (expense), net   4     23     10  
Total other expense, net   (66 )   (86 )   (144 )
Income before income tax (benefit) expense 1,163 1,415 1,164
Income tax benefit (expense)   567     (24 )   (22 )
Net income $ 1,730   $ 1,391   $ 1,142  
Net income per share:
Basic $ .32   $ .26   $ .22  
Diluted $ .32   $ .26   $ .22  
Shares used in calculation of net income per share:
Basic   5,353     5,251     5,244  
Diluted   5,413     5,346     5,248  

Copyright Business Wire 2010

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