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Volume down, profits up at Cyanotech

November 7, 2017
AlgaeIndustryMagazine.com

Cyanotech Corporation has announced financial results for the second quarter of fiscal year 2018, ended September 30, 2017. For the second quarter of fiscal 2018 compared to the second quarter of fiscal 2017, net sales were $8,055,000 compared to $9,862,000 for the Hawaii-based grower and manufacturer of spirulina and astaxanthin products. Gross profit was $3,620,000, with gross profit margin of 44.9%, compared to gross profit of $3,885,000 and gross profit margin of 39.4%. Operating income was $619,000 compared to $247,000. Net income was $475,000 or $0.08 per diluted share, compared to $99,000 or $0.02 per diluted share.

“While net sales were lower compared to the second quarter of fiscal 2017, gross profit margin increased 5.5 percentage points due to our continuing focus on the marketing of our higher margin Nutrex Hawaii branded products at retail, as well as lower net overall product costs from improved Astaxanthin production practices,” said Gerry Cysewski, Ph.D., Cyanotech’s CEO.

Cyanotech’s President, Mawae Morton, added, “On a year to date basis, sales of our packaged products remain stable, showing a 7% increase over last year. The company’s second quarter net sales decrease of 18% was driven by a 16% decrease in sales of our packaged products and a 28% decrease in sales of our bulk products. The packaged sales decrease is related to the quarterly variance year to year in the timing of orders, as well as the shift away from lower margin channels into higher margin ones. The 28% decrease in bulk sales was primarily the result of a lack of sufficient spirulina supply. The company engaged in various alternative cultivation methods for spirulina during the quarter prompted by self-imposed water conservation efforts related to county wide water restrictions. These alternative methods had a net negative impact on spirulina production for the quarter. The county wide water restrictions were lifted at the end of the quarter.”

Cyanotech will host a Skype broadcast at 5:00 p.m. ET on Thursday, November 9, 2017 to respond to questions about its operating results and other topics of interest. To join the broadcast: http://cyanotech.com/meet

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