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Cyanotech net sales up 20% for Q-1 FY2018

August 10, 2017
AlgaeIndustryMagazine.com

Sales of Cyanotech’s packaged astaxanthin increased 51% in the recent quarter, primarily the result of increased sales to Costco.

Cyanotech Corporation has announced financial results for the first quarter of fiscal year 2018, ended June 30, 2017. Compared to the first quarter of fiscal 2017, net sales were $8,809,000 compared to $7,322,000, an increase of 20.3%. Gross profit was $3,603,000, with gross profit margin of 40.9%, compared to gross profit of $2,821,000 and gross profit margin of 38.5%. Operating income was $620,000 compared to operating loss of ($610,000). Net income was $501,000 or $0.09 per diluted share, compared to net loss of ($691,000) or ($0.12) per diluted share.

Commenting on the first quarter results (changes shown vs. first quarter of fiscal 2017), Gerry Cysewski, Ph.D., Cyanotech’s CEO, noted, “We are seeing positive results from the many changes we put in place during the last fiscal year. Our results this quarter reflected our continuing strategic focus on marketing our Nutrex Hawaii branded products at retail, as well as improved production practices and reduction in our cost structure.

“Net sales increased 20% for the quarter, driven by a 42% increase in our packaged products, offset by a 34% decrease in bulk sales. The increase in sales of our packaged products was the result of our continued focus on strategic channels. Sales of our packaged astaxanthin increased 51%, which is primarily the result of increased sales to Costco. Sales growth at Amazon contributed to a 22% increase in our packaged spirulina sales.

“Due to inventory shortages following low spirulina production in the fourth quarter of fiscal 2017 we were not able to fulfill all of the demand for packaged spirulina products this quarter. Compared to the fourth quarter of fiscal 2017, sales to Costco increased 100% and sales to Amazon increased 149%, the latter driven mainly by an inventory build. We achieved these results without increasing our year-over-year sales and marketing operating expenses.

“The 34% decrease in sales of our bulk products is primarily the result of the lack of available spirulina supply during the quarter. International sales represented 27% of net sales for the current quarter compared to 35% for the same period last year.

“Our gross profit margin increased by 2.4 percentage points compared to the same period last year due to improved customer and product mix and lower astaxanthin costs from prior quarters’ production. Additionally, astaxanthin production for the quarter increased by over 20% compared to the same period last year as a result of new cultivation techniques and farm management practices that have been integrated over the last two years. We are pleased to see the results of these changes; specifically, stabilized open pond cultivation and improved consistency of our production over recent quarters.”

For the trailing 12 months ended June 30, 2017 compared to the trailing 12 months ended June 30, 2016, net sales were $33,529,000 compared to $31,568,000, an increase of 6.2%. Gross profit was $13,006,000, with gross profit margin of 38.8%, compared to gross profit of $11,763,000 and gross profit margin of 37.3%. Net loss was ($23,000) or $0.0 per diluted share, compared to a net loss of ($4,981,000) or ($0.89) per diluted share.

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