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Cyanotech reports 1st quarter FY19 results

August 14, 2018
AlgaeIndustryMagazine.com

Astaxanthin production at one of Cyanotech’s Hawaiian facilities.

Hawaii-based algae nutrition company Cyanotech announced financial results for the first quarter of fiscal year 2019, ended June 30, 2018. For the first quarter of fiscal 2019 compared to the first quarter of fiscal 2018, net sales were $7,145,000 compared to $8,809,000. Gross profit was $1,836,000, with gross profit margin of 25.7%, compared to gross profit of $3,603,000 and gross profit margin of 40.9%. Operating loss was ($1,167,000) compared to operating income of $620,000. Net loss was ($1,275,000) or ($0.22) per diluted share, compared to net income of $501,000 or $0.09 per diluted share.

Commenting on the first quarter fiscal 2019 results (changes shown vs. the first quarter of fiscal 2018), Cyanotech’s Chief Executive Officer, Mawae Morton, said, “Cyanotech’s results for the quarter reflect the impact of a spirulina production shutdown and re-inoculation that was required during this time period. The re-inoculation process limited spirulina supply, which impacted us from both a cost and a sales standpoint. The lower spirulina production levels in both Q4 of fiscal 2018 (-63% compared to Q4 of fiscal 2017) and in Q1 of the current fiscal year (-76% compared to Q1 of fiscal 2018) had a negative impact on the current quarter’s performance. In addition to a 14.7% decrease in sales volume, the lower production levels resulted in a $1.1 million increase in costs in the current quarter which reduced gross margin by 14.9 points. Additionally, spirulina inventory on hand at the end of the quarter includes $0.6 million of higher overhead costs that will be amortized in the next quarter and will negatively impact gross profit and margin. Despite the supply disruption, ongoing demand for our Hawaiian Spirulina remains strong.

“Net sales decreased 19% for the quarter, driven by a 17% decrease in our packaged products and a 29% decrease in bulk sales. 12% of the decrease in sales of our packaged products was the result of lower supply of spirulina, and 5% was due to the quarterly variance year to year in the timing of international orders for astaxanthin. The decrease in sales of our bulk products is primarily the result of the lack of available spirulina supply.”

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