Cyanotech Reports Financial Results For The Second Quarter And First Six Months Of Fiscal 2012

Cyanotech Corporation (Nasdaq Capital Market: CYAN), a world leader in microalgae-based, high-value nutrition and health products, today announced financial results for the second quarter and first six months of fiscal year 2012, ended September 30, 2011.

Second Quarter 2012

For the second quarter of fiscal 2012 compared to the second quarter of fiscal 2011, revenues were $5,989,000 compared to $3,834,000. Gross profit was $2,790,000, with gross profit margin of 47%, compared to gross profit of $1,652,000 and gross profit margin of 43%. Net income was $875,000 or $0.16 per diluted share, compared to net income of $526,000 or $0.10 per diluted share.

Six Months 2012

For the first six months of fiscal 2012 compared to the first six months of fiscal 2011, revenues were $11,939,000 compared to $7,690,000. Gross profit was $4,894,000, with gross profit margin of 41%, compared to gross profit of $3,311,000 and gross profit margin of 43%. Net income was $1,361,000 or $0.25 per diluted share, compared to net income of $925,000 or $0.17 per diluted share.

Trailing 12 Months

For the trailing 12 months ended September 30, 2011, compared to the trailing 12 months ended September 30, 2010, revenues were $21,076,000 compared to revenues of $15,486,000. Gross profit was $7,924,000, with gross profit margin of 38%, compared to gross profit of $6,449,000 and gross profit margin of 42%. Net income was $2,166,000 or $0.40 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 in the fourth quarter of fiscal 2011, compared to $1,304,000, or $0.26 per diluted share. Income before the income tax benefit was $1,623,000 compared to $1,326,000.

Commenting on the second quarter results, Brent Bailey, President and CEO, said “We’re pleased with our progress on key measures in the second quarter compared to the second quarter of fiscal 2011:
  • Net sales reached a record $5,989,000 (+$2,155,000 and +56%)
  • Gross margin increased to 46.6% (+3.5 pts.)
  • Net Income grew to $875,000 (+$349,000 and +66%)
  • Cash increased to $4,091,000 (+$3,308,000 and +422%)
  • Inventory declined to $3,188,000 (-$1,425,000 and -31%)

In addition, our Nutrex-branded sales grew 73% and represented 37% (+3 pts.) of our net sales."

For the second quarter of fiscal 2011, Spirulina sales accounted for 40% of total revenues and natural Astaxanthin sales for 60%. International sales were 27% 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-Q for the period ended September 30, 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
CONDENSED CONSOLIDATED BALANCE SHEETS
 
(Dollars in thousands except par value and number of shares)
(Unaudited)
 
 

September 30,2011
   

March 31,2011
ASSETS
Current assets:
Cash and cash equivalents $ 4,091 $ 2,062
Accounts receivable, net of allowance for doubtful accounts of $58 at September 30, 2011 and March 31, 2011 2,524 2,641
Inventories, net 3,188 3,627
Deferred tax assets 17 17
Prepaid expenses and other assets 225   134  
Total current assets 10,045 8,481
 
Equipment and leasehold improvements, net 4,871 4,557
Deferred tax assets 535 535
Other assets 275   287  
Total assets $ 15,726   $ 13,860  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt $ 224 $ 204
Customer deposits 77 115
Accounts payable 1,236 1,054
Accrued expenses 1,019   823  

Total current liabilities
2,556 2,196
 
Long-term debt, excluding current maturities 493   553  
Total liabilities 3,049   2,749  
 
Commitments and contingencies
 
Stockholders’ equity:

Common stock of $0.02 par value, shares authorized 7,500,000; 5,405,618 shares issued and outstanding at September 30, 2011 and 5,391,968 shares at March 31, 2011
108 108
Additional paid-in capital 28,008 27,803
Accumulated deficit (15,439 ) (16,800 )
Total stockholders’ equity 12,677   11,111  
 
Total liabilities and stockholders’ equity $ 15,726   $ 13,860  
 
CYANOTECH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
(Dollars in thousands, except per share amounts)
(Unaudited)
 
  Three Months EndedSeptember 30,   Six Months EndedSeptember 30,
  2011       2010     2011       2010  
 
NET SALES $ 5,989 $ 3,834 $ 11,939 $ 7,690
COST OF SALES   3,199     2,182     7,045     4,379  
Gross profit   2,790     1,652     4,894     3,311  
 
OPERATING EXPENSES:
General and administrative 1,117 643 2,065 1,406
Sales and marketing 609 393 1,176 776
Research and development 89 62 160 146
Loss on disposal of equipment and leasehold improvements   62         64      
Total operating expenses  

1,877
    1,098     3,465     2,328  
 
Income from operations   913     554     1,429     983  
 
Interest expense, net   (10 )   (18 )   (24 )   (38 )
 
Income before income taxes 903 536 1,405 945
 
PROVISION FOR INCOME TAXES   28     10     44     20  
 
NET INCOME $ 875   $ 526   $ 1,361   $ 925  
 
NET INCOME PER SHARE:
Basic $ .16   $ .10   $ .25   $ .17  
Diluted $ .16   $ .10   $ .25   $ .17  
 
SHARES USED IN CALCULATION OF NET INCOME PER SHARE:
Basic   5,398     5,374     5,397     5,314  
Diluted   5,473     5,390     5,471     5,333  

Copyright Business Wire 2010

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