KAILUA KONA, Hawaii--()--Cyanotech Corporation (Nasdaq Capital Market: CYAN), a world leader in microalgae-based, high-value nutrition and health products, today announced financial results for the third quarter and first nine months of fiscal year 2013, ended December 31, 2012.
“Three factors negatively impacted profitability in the third quarter”
Third Quarter 2013
For the third quarter of fiscal 2013 compared to the third quarter of fiscal 2012, revenues were $7,242,000 compared to $6,706,000, an increase of 8%. Gross profit was $2,865,000, with gross profit margin of 40%, compared to gross profit of $2,827,000 and gross profit margin of 42%. Net income was $607,000 or $0.11 per diluted share, compared to net income of $1,113,000 or $0.20 per diluted share.
Commenting on the third quarter fiscal 2013 results (changes shown vs. third quarter of fiscal 2012), Brent Bailey, President and CEO, noted:
“Demand in the third quarter was strong with net sales at an all-time record $7,242,000 (+8%). The growth is in the strategic areas we have identified as priorities and is driven by our increased sales and marketing spending:
- Nutrex Mainland: +49%
- Nutrex Hawaii: +30%
- Nutrex Direct (online): +96%
- International Bulk: +73%
“Packaged products generated 43% (+10 pts.) of our revenue as our market shares in the Natural Products Channel continue to grow:
- Astaxanthin: 45% (+16 pts.)
- Spirulina: 44% (+4 pts.)
“Three factors negatively impacted profitability in the third quarter:
- Planned sales and marketing expenses, which increased 59% due to increased advertising, promotional events and web support to drive our packaged products business; our new Scientific Advisory Board and public relations services; and incremental headcount.
- Continued higher cost of Spirulina production, due to lower than expected harvests, which are expected to continue in the fourth quarter.
- Increased legal fees.”
First Nine Months 2013
For the first nine months of fiscal 2013 compared to the first nine months of fiscal 2012, revenues were $20,684,000 compared to $18,645,000, an increase of 11%. Gross profit was $8,251,000, with gross profit margin of 40%, compared to gross profit of $7,721,000 and gross profit margin of 41%. Net income was $1,576,000 or $0.28 per diluted share, compared to net income of $2,473,000 or $0.45 per diluted share.
Trailing 12 Months
For the trailing 12 months ended December 31, 2012, compared to the trailing 12 months ended December 31, 2011, revenues were $26,670,000 compared to revenues of $23,863,000, an increase of 12%. Gross profit was $10,304,000, with gross profit margin of 39%, compared to gross profit of $9,519,000 and gross profit margin of 40%. Net income was $2,734,000 or $0.50 per diluted share, compared to $3,268,000, or $0.61 per diluted share.
About Cyanotech — Cyanotech 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 our 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 AssociationTM. 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 December 31, 2012. 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 SUBSIDIARY|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|(Dollars in thousands except par value and number of shares)|
|December 31,||March 31,|
|Cash and cash equivalents||$||3,609||$||5,061|
Accounts receivable, net of allowance for doubtful accounts of $6
|Deferred tax assets||137||137|
|Prepaid expenses and other current assets||279||300|
|Total current assets||11,755||11,419|
|Equipment and leasehold improvements, net||8,471||5,834|
|Deferred tax assets||1,307||1,307|
|LIABILITIES AND STOCKHOLDERS’ EQUITY|
|Current maturities of long-term debt||$||64||$||234|
|Total current liabilities||2,855||3,361|
|Long-term debt, excluding current maturities||2,286||400|
|Commitments and contingencies|
Common stock of $0.02 par value, shares authorized 50,000,000;
|Additional paid-in capital||28,910||28,324|
|Total stockholders’ equity||17,426||15,265|
|Total liabilities and stockholders’ equity||$||22,583||$||19,038|
|CYANOTECH CORPORATION AND SUBSIDIARY|
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS|
|(Dollars in thousands, except per share amounts)|
|Three Months Ended||Nine Months Ended|
|December 31,||December 31,|
|COST OF SALES||4,377||3,879||12,433||10,924|
|General and administrative||1,175||955||3,608||3,019|
|Sales and marketing||1,004||631||2,722||1,808|
|Research and development||52||77||183||237|
|Loss on disposal of equipment and leasehold improvements||1||1||36||65|
|Total operating expenses||2,232||1,664||6,549||5,129|
|Income from operations||633||1,163||1,702||2,592|
|Loss on extinguishment of debt||—||—||(51||)||—|
|Interest expense, net||(14||)||(14||)||(43||)||(38||)|
|Total other expense, net||(14||)||(14||)||(94||)||(38||)|
|Income before provision for income taxes||619||1,149||1,608||2,554|
|PROVISION FOR INCOME TAXES||(12||)||(36||)||(32||)||(81||)|
|NET INCOME PER SHARE:|
|SHARES USED IN CALCULATION OF NET INCOME PER SHARE:|