Cyanotech turns profit on higher revenue
Cyanotech Corp., a Big Island producer of nutritional products from microalgae, swung to a fiscal fourth-quarter gain of $194,000 from a year-earlier loss as sales picked up of its Spirulina products.
Overall revenue rose 27 percent to $3.3 million from $2.6 million, despite a continued sales slowdown in Japan of NatuRose, a source of natural astaxanthin for use in animal feeds.
But last quarter's rebound wasn't enough to salvage the year for Cyanotech, which posted a fiscal 2006 net loss of $268,000, or 1 cent a share, and a 2.7 percent drop in revenue to $11.1 million. In fiscal 2005, Cyanotech had net income of $486,000, or 2 cents a share, on revenue of $11.4 million.
The company is facing delisting from the Nasdaq SmallCap market on Tuesday because it has been unable to comply with a Nasdaq-imposed deadline to boost its stock to at least $1 a share for 10 consecutive trading days. However, Cyanotech could receive a six-month extension to meet that requirement if it maintains all other listing criteria besides the $1 stock price.
Cyanotech's stock, which last reached the required threshold on Oct. 18 when it closed at $1.02, fell as low as 55 cents on Feb. 21. The shares surged 35 percent over a two-day period to 85 cents in April on Internet message board speculation that linked the company's algae plants to a possible source of the alternative fuel ethanol. But those gains evaporated after Gerald Cysewski, the chairman, president and chief executive of the company, said the company had no plans to develop ethanol.
Cysewski said yesterday that purchasing patterns among the company's customers are variable, but the market appears strong for Spirulina, a whole microalgae rich in many nutrients, and zeaxanthin sales.
He also said sales for another human nutritional product, BioAstin, expanded last quarter due to a marketing program that attracted new customers and helped offset a reduction of orders from one large customer. BioAstin, a natural source of astaxanthin, has been shown to be an extremely potent antioxidant as well as having anti-inflammatory properties.
But NatuRose sales continued to slump in Japan because of lower sales of sea bream fish in that country's aquaculture markets.
"Growers used less natural astaxanthin in their feed," Cysewski said. "We now feel that this condition is likely to persist."
Cysewski said NatuRose's sales to all markets were slightly higher than the year-earlier quarter due to initial ordering by other customers.
"We are seeking to expand NatuRose sales to additional markets, such as salmon feed producers whose customers seek an 'all-natural' designation for their products," he said.
In the fourth quarter of fiscal 2005, Cyanotech had a net loss of $74,000, or nil per share. It earned 1 cent per share last quarter.