KAILUA KONA, Hawaii--(BUSINESS WIRE)--Cyanotech Corporation (Nasdaq Capital Market: CYAN), a world leader in microalgae-based, high-value nutrition and health products, today announced financial results for the fourth quarter and fiscal year 2013, ended March 31, 2013.
Fourth Quarter 2013
For the fourth quarter of fiscal 2013 compared to the fourth quarter of fiscal 2012, net sales were $6,897,000 compared to $5,986,000, an increase of 15%. Gross profit was $2,708,000, with gross profit margin of 39%, compared to gross profit of $2,053,000 and gross profit margin of 34%. Net income was $2,633,000 or $0.47 per diluted share, compared to net income of $1,158,000 or $0.20 per diluted share. Net income in the fourth quarter includes a non-cash income tax benefit of $1,912,000 recognized on the elimination of the valuation allowance on deferred tax assets, compared to a reduction of the valuation allowance in the fourth quarter of last year of $892,000. Operating income for the quarter was $597,000 compared to $311,000 for the same quarter last year, an increase of 92%.
Regarding the 4th quarter fiscal 2013 results (changes shown versus fiscal 2012), Brent Bailey, President and CEO, stated:
“In the 4th quarter, our packaged consumer products represented more than one-half of company revenue for the first time, accounting for 52% (+14 pts.) of total net sales. Net sales growth for these products, by area, was:
- Nutrex Mainland: +73%
- Nutrex Hawaii: +14%
- Nutrex Direct (online): +90%
- Nutrex International: +203%
“Retail dollar growth in the natural products channel of our Astaxanthin products was +59% and our market share was 50% (+22 pts.). Our Spirulina retail dollar growth for the quarter was +55% and our market share was 50% (+8 pts.).
“The solid revenue growth combined with a stronger gross margin from improved Spirulina production and continued growth in Astaxanthin production, nearly doubled operating profit to $597,000 (+92%) in the 4th quarter.”
Fiscal Year 2013
For fiscal 2013 compared to fiscal 2012, net sales were $27,581,000 compared to $24,631,000, an increase of 12%. Gross profit was $10,958,000, with gross profit margin of 40%, compared to gross profit of $9,774,000 and gross profit margin of 40%. Net income was $4,209,000 or $0.74 per diluted share, compared to net income of $3,632,000 or $0.66 per diluted share. Net income for the year includes a non-cash income tax benefit of $1,912,000 recognized on the elimination of the valuation allowance on deferred tax assets, compared to a reduction of the valuation allowance of $892,000 in fiscal 2012. Operating income for the year was $2,299,000 compared to $2,903,000 for fiscal 2012, a decrease of 21%.
Commenting on the fiscal 2013 results (changes shown vs. fiscal 2012), Brent Bailey noted:
“Fiscal 2013 net sales were a record $27,581,000 (+12%) and were driven by strong growth in our consumer business:
- Nutrex Mainland: +54%
- Nutrex Hawaii: +26%
- Nutrex Direct (online): +81%
- Nutrex International: +105%
“Retail dollar growth of our Astaxanthin and Spirulina products in the natural products channel was +41% and +35%, respectively, and our market share was 40% (+13 pts.) and 45% (+5 pts.), respectively. Net sales per capita of our Nutrex products in the Hawaii market reached $1.47 in fiscal 2013. Packaged products now generate 45% (+10 pts.) of our total revenue, yet utilize only 36% (+16 pts.) and 18% (+6 pts.) of our Spirulina and Astaxanthin production, respectively.
“Operating income for the year was negatively impacted by three factors:
- Under absorbed overhead due to lower than expected Spirulina production in the first three quarters of the year.
- The investments we are making in people, infrastructure and marketing which are driving our topline growth.
- Increased legal fees.”
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 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-K for the period ended March 31, 2013. As such the following Financial Tables are provided only as a guide and other factors are more fully detailed in the Company’s annual Form 10-K filings with the Securities and Exchange Commission.)
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CYANOTECH CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS March 31, |
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| 2013 | 2012 | |||||||||||||||
|
(in thousands, except share data) |
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| ASSETS | ||||||||||||||||
| Current assets: | ||||||||||||||||
| Cash and cash equivalents | $ | 4,364 | $ | 5,061 | ||||||||||||
| Accounts receivable, net of allowance for doubtful accounts of $6 in 2013 and $16 in 2012 | 3,766 | 2,373 | ||||||||||||||
| Inventories, net | 3,688 | 3,548 | ||||||||||||||
| Deferred tax assets | 110 | 137 | ||||||||||||||
| Prepaid expenses and other current assets | 263 | 300 | ||||||||||||||
| Total current assets | 12,191 | 11,419 | ||||||||||||||
| Equipment and leasehold improvements, net | 8,835 | 5,834 | ||||||||||||||
| Restricted cash | 3,360 | — | ||||||||||||||
| Deferred tax assets | 3,429 | 1,307 | ||||||||||||||
| Other assets | 772 | 478 | ||||||||||||||
| Total assets | $ | 28,587 | $ | 19,038 | ||||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
| Current liabilities: | ||||||||||||||||
| Current maturities of long-term debt | $ | 128 | $ | 234 | ||||||||||||
| Customer deposits | 33 | 49 | ||||||||||||||
| Accounts payable | 1,852 | 1,726 | ||||||||||||||
| Accrued expenses | 872 | 1,352 | ||||||||||||||
| Total current liabilities | 2,885 | 3,361 | ||||||||||||||
| Long-term debt, less current maturities | 5,454 | 400 | ||||||||||||||
| Deferred rent | 21 | 12 | ||||||||||||||
| Total liabilities | 8,360 | 3,773 | ||||||||||||||
| Commitments and contingencies | ||||||||||||||||
| Stockholders’ equity: | ||||||||||||||||
| Common stock of $0.02 par value, authorized 50,000,000 shares; issued and outstanding 5,463,938 shares at 2013 and 5,440,968 shares at 2012 | 109 | 109 | ||||||||||||||
| Additional paid-in capital | 29,077 | 28,324 | ||||||||||||||
| Accumulated deficit | (8,959 | ) | (13,168 | ) | ||||||||||||
| Total stockholders’ equity | 20,227 | 15,265 | ||||||||||||||
| Total liabilities and stockholders’ equity | $ | 28,587 | $ | 19,038 | ||||||||||||
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CYANOTECH CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Year ended March 31, |
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| 2013 | 2012 | 2011 | ||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||
| Net sales | $ | 27,581 | $ | 24,631 | $ | 16,827 | ||||||||||||||
| Cost of sales | 16,623 | 14,857 | 10,486 | |||||||||||||||||
| Gross profit | 10,958 | 9,774 | 6,341 | |||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| General and administrative | 4,680 | 4,014 | 2,822 | |||||||||||||||||
| Sales and marketing | 3,675 | 2,480 | 1,986 | |||||||||||||||||
| Research and development | 258 | 320 | 282 | |||||||||||||||||
| Loss on disposal of equipment and leasehold improvements | 46 | 57 | 22 | |||||||||||||||||
| Total operating expense | 8,659 | 6,871 | 5,112 | |||||||||||||||||
| Income from operations | 2,299 | 2,903 | 1,229 | |||||||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Loss on extinguishment of debt | (51 | ) | — | — | ||||||||||||||||
| Interest expense, net | (60 | ) | (55 | ) | (70 | ) | ||||||||||||||
| Other income, net | — | 5 | 4 | |||||||||||||||||
| Total other expense, net | (111 | ) | (50 | ) | (66 | ) | ||||||||||||||
| Income before income tax benefit (expense) | 2,188 | 2,853 | 1,163 | |||||||||||||||||
| Income tax benefit (expense) | 2,021 | 779 | 567 | |||||||||||||||||
| Net income | $ | 4,209 | $ | 3,632 | $ | 1,730 | ||||||||||||||
| Net income per share: | ||||||||||||||||||||
| Basic | $ | 0.77 | $ | 0.67 | $ | 0.32 | ||||||||||||||
| Diluted | $ | 0.74 | $ | 0.66 | $ | 0.32 | ||||||||||||||
| Shares used in calculation of net income per share: | ||||||||||||||||||||
| Basic | 5,455 | 5,414 | 5,353 | |||||||||||||||||
| Diluted | 5,655 | 5,534 | 5,413 | |||||||||||||||||
