Cyanotech Reports Financial Results for the Second Quarter and First Six Months of Fiscal 2021

KAILUA KONA, Hawaii--()--Cyanotech Corporation (Nasdaq Capital Market: CYAN), a world leader in microalgae-based, high-value nutrition and dietary supplements, announced financial results for the second quarter and first six months of fiscal year 2021, ended September 30, 2020.

Cyanotech’s Chief Executive Officer, Gerald R. Cysewski, Ph.D., said: “Cyanotech continues to focus on its core operational functions. In packaged goods, we are seeing an increase in sales to customers with an on-line presence as the COVID-19 restrictions impact brick and mortar stores.”

“On October 1, 2020, we launched a line extension of BioAstin® Hawaiian Astaxanthin® in a new delivery form, water dispersible powder, available in both 1% and 2% concentrations to the bulk ingredients market worldwide.”

Second Quarter Fiscal 2021

Cyanotech reported net sales of $8,571,000 for the second quarter of fiscal 2021 compared to $7,690,000 for the second quarter of fiscal 2020. Gross profit was $3,301,000, with gross profit margin of 38.5%, compared to gross profit of $3,063,000 and gross profit margin of 39.8%. Operating income for the second quarter was $282,000 compared to $409,000 last year. Net income was $155,000, or $0.03 per diluted share, compared to a net income of $228,000, or $0.04 per diluted share.

Six Months Fiscal 2021

For the six months ended September 30, 2020, Cyanotech reported net sales of $15,923,000 compared to $15,761,000 for the same period in fiscal 2020. Gross profit was $6,276,000, with gross profit margin of 39.4%, compared to gross profit of $6,738,000 and gross profit margin of 42.8%. Net income was $293,000, or $0.05 per diluted share, compared to a net income of $95,000, or $0.02 per diluted share.

Trailing Twelve Months

For the trailing twelve months ended September 30, 2020, compared to the trailing twelve months ended September 30, 2019, net sales were $32,060,000 compared to $31,863,000. Gross profit was $12,238,000, with gross profit margin of 38.2%, compared to $13,082,000 and 41.1%. Net income was $586,000 or $0.10 per diluted share, compared to net loss of ($1,091,000) or ($0.19) per diluted share.

Please review the Company’s Form 10-Q for the period ended September 30, 2020 for more detailed information.

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— Cyanotech will host a Skype broadcast at 8:00 PM EST on Friday, November 13, 2020 to respond to questions about its operating results and other topics of interest. Interested parties are asked to submit questions to questions@cyanotech.com before 12 p.m. (noon) EST on Friday, November 13, 2020. The Company will respond only to relevant questions relating to the Company’s second quarter fiscal 2021 financial performance and will not be accepting any questions or comments during the broadcast.

To join the broadcast, please browse http://cyanotech.com/meet approximately five minutes prior to the start time.

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About Cyanotech — Cyanotech Corporation, a world leader in microalgae technology for more than 30 years, produces BioAstin® Hawaiian Astaxanthin® and Hawaiian Spirulina Pacifica®. These all-natural, dietary ingredients and supplements leverage our experience and reputation for quality, building nutritional brands which promote health and well-being. The Company’s mission is to fulfill the promise of whole health through Hawaiian microalgae. Cyanotech’s BioAstin® offers superior antioxidant activity which supports skin, eye and joint health, as well as recovery from exercise*. Cyanotech's Spirulina products offer nutrition that supports cardiovascular health and immunity*. All Cyanotech products are produced from microalgae grown at our 96-acre facility in Kona, Hawaii using patented and proprietary technology and are Generally Recognized as Safe (GRAS) for use in food products. Cyanotech sells its products direct to consumers at retail locations in the United States and online at www.nutrex-hawaii.com and also distributes to dietary supplement, nutraceutical and cosmeceutical manufacturers and marketers. The Company is regulated by the Food and Drug Administration (“FDA”). Visit www.cyanotech.com for more information.

*These statements have not been evaluated by the FDA. This product is not intended to diagnose, treat, cure or prevent any disease.

“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-Q for the second quarter fiscal 2021 ended September 30, 2020, which can be found on the Cyanotech website (www.cyanotech.com) under Investors>Investor Filings upon filing. 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.

 

CYANOTECH CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

(Unaudited)

 

 

September 30,
2020

 

 

March 31,
2020

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash

 

$

4,253

 

 

$

2,417

 

Accounts receivable, net of allowance for doubtful accounts of $34 at September 30, 2020 and $13 at March 31, 2020

 

 

2,083

 

 

 

2,154

 

Inventories, net

 

 

10,074

 

 

 

9,653

 

Prepaid expenses and other current assets

 

 

433

 

 

 

504

 

Total current assets

 

 

16,843

 

 

 

14,728

 

 

 

 

 

 

 

 

 

 

Equipment and leasehold improvements, net

 

 

12,590

 

 

 

13,042

 

Operating lease right-of-use assets, net

 

 

3,678

 

 

 

3,834

 

Other assets

 

 

142

 

 

 

183

 

Total assets

 

$

33,253

 

 

$

31,787

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,300

 

 

$

2,137

 

Accrued expenses

 

 

978

 

 

 

849

 

Customer deposits

 

 

198

 

 

 

327

 

Operating lease obligations, current portion

 

 

333

 

 

 

319

 

Short-term contract obligation

 

 

 

 

 

38

 

Line of credit

 

 

2,000

 

 

 

2,000

 

Current maturities of long-term debt

 

 

2,197

 

 

 

689

 

Total current liabilities

 

 

8,006

 

 

 

6,359

 

 

 

 

 

 

 

 

 

 

Long-term debt, less current maturities

 

 

5,550

 

 

 

6,009

 

Long-term operating lease obligations

 

 

3,349

 

 

 

3,519

 

Other long-term liabilities

 

 

37

 

 

 

54

 

Total liabilities

 

 

16,942

 

 

 

15,941

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock of $0.01 par value, authorized 10,000,000 shares; no shares issued and outstanding

 

 

 

 

 

 

Common stock of $0.02 par value, authorized 50,000,000 shares; issued and outstanding 6,097,073 shares at September 30, 2020 and 6,011,885 shares at March 31, 2020

 

 

122

 

 

 

120

 

Additional paid-in capital

 

 

33,164

 

 

 

32,994

 

Accumulated deficit

 

 

(16,975

)

 

 

(17,268

)

Total stockholders’ equity

 

 

16,311

 

 

 

15,846

 

Total liabilities and stockholders’ equity

 

$

33,253

 

 

$

31,787

 

 

CYANOTECH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 

 

Three Months Ended
September 30,

 

 

Six Months Ended
September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

8,571

 

 

$

7,690

 

 

$

15,923

 

 

$

15,761

 

Cost of sales

 

 

5,270

 

 

 

4,627

 

 

 

9,647

 

 

 

9,023

 

Gross profit

 

 

3,301

 

 

 

3,063

 

 

 

6,276

 

 

 

6,738

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

1,472

 

 

 

1,157

 

 

 

2,800

 

 

 

3,188

 

Sales and marketing

 

 

1,374

 

 

 

1,343

 

 

 

2,618

 

 

 

2,751

 

Research and development

 

 

173

 

 

 

154

 

 

 

308

 

 

 

341

 

Total operating expenses

 

 

3,019

 

 

 

2,654

 

 

 

5,726

 

 

 

6,280

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

282

 

 

409

 

 

550

 

 

458

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(121

)

 

 

(182

)

 

 

(251

)

 

 

(367

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

161

 

 

227

 

 

299

 

 

91

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense (benefit)

 

 

6

 

 

(1

)

 

 

6

 

 

(4

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

155

 

$

228

 

$

293

 

$

95

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.03

 

$

0.04

 

$

0.05

 

$

0.02

Diluted

 

$

0.03

 

$

0.04

 

$

0.05

 

$

0.02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in calculation of net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

6,054

 

 

 

5,965

 

 

 

6,042

 

 

 

5,942

 

Diluted

 

 

6,163

 

 

 

5,973

 

 

 

6,147

 

 

 

5,963

 

 

Contacts

Bruce Russell
(310) 346-6131
brussell@cyanotech.com

Release Summary

Cyanotech Reports Financial Results for the Second Quarter and First Six Months of Fiscal 2021

Contacts

Bruce Russell
(310) 346-6131
brussell@cyanotech.com