Cyanotech Reports Financial Results For The Second Quarter And First Six Months Of Fiscal Year 2017

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 2017, ended September 30, 2016.

Second Quarter 2017

For the second quarter of fiscal year 2017 compared to the second quarter of fiscal year 2016, net sales were a record $9,862,000 compared to $8,516,000, an increase of 16%. Gross profit was $3,885,000, with gross profit margin of 39.4%, compared to gross profit of $3,100,000 and gross profit margin of 36.4%. Operating income was $247,000 compared to operating loss of ($139,000). Net income was $99,000 or $0.02 per diluted share, compared to net income of $14,000 or $0.00 per diluted share.

Commenting on the second quarter of fiscal 2017 results (changes shown vs. the second quarter of fiscal 2016), Gerry Cysewski, Ph.D., Cyanotech's President and CEO, noted:

"Net sales growth of 16% was driven by an 18% increase in sales of our packaged products and an 8% increase in sales of our bulk products. Growth in our packaged products was primarily due to our Costco expansion. During this quarter, BioAstin expanded into an additional 64 warehouse stores in Costco's Northwest region and now is available in 252 Costco warehouses, or roughly 52% of their domestic total.

"We are also seeing strong increases in our sales of bulk spirulina, due to higher international demand.

"Gross profit margin increased by 3 percentage points due to a reduction of promotional discounts and lower cost per unit of spirulina resulting from higher production compared to last year.

"Operating expenses increased by $399,000, driven by an increase in legal costs of $761,000 related primarily to an ongoing litigation matter, offset mainly by a decrease of $176,000 in auditing fees and a decrease of $146,000 in advertising spending."

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