Cyanotech halves loss on higher sales
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Kona-based Cyanotech Corp. cut its net loss nearly in half to $594,000, or 11 cents a share, in its fiscal third quarter on the strength of a 72 percent rise in natural astaxanthin sales. The loss came despite a 26 percent decline in sales of spirulina, the company's dietary supplement.
A year earlier, Cyanotech, which produces nutritional products from microalgae, had a net loss of $1.2 million, or 23 cents a share.
Revenue rose 13.5 percent to $2.8 million from $2.4 million at the end of Decemberr. Gerald Cysewski, chairman, president and chief executive of Cyanotech, said revenue was constrained in the third quarter due to difficulties in spirulina production, exacerbated by heavy rains and flooding in December.
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Cyanotech Corp., bolstered by a 72 percent increase in natural astaxanthin sales, slashed its loss nearly in half to $594,000 in its fiscal third quarter.
The Kona-based producer of nutritional products from microalgae has been in a transition phase since restating three years of earnings in 2007 due to an internal accounting probe and de-emphasizing its NatuRose animal feed nutritional product due to slowing sales in Japan.
"Our renewed marketing emphasis on retail products and condition-specific formulations announced earlier in the fiscal year has been moderated while we increase cash resources, which should be assisted going forward by the approximate 20 percent reduction in our work force announced in December," said Gerald Cysewski, chairman, president and chief executive of Cyanotech.
Cysewski announced in November that he was stepping down from his three executive positions as part of the company's shift toward human nutrition products. He will serve as chief scientific officer, where he will develop new microalgae products, once a new president and CEO is found.
Cyanotech's narrower loss came despite a 26 percent decline in sales of spirulina, the company's dietary supplement. A year earlier, Cyanotech had a net loss of $1.2 million, or 23 cents a share. The loss per share last quarter was 11 cents.
Revenue rose 13.5 percent to $2.8 million from $2.4 million for the period ended Dec. 31, with a gross profit margin of 13 percent compared with 3 percent a year ago.
Cysewski said revenue was constrained in the third quarter due to difficulties in spirulina production, exacerbated by heavy rains and flooding in December.
That made it "impossible to fully satisfy order demand," Cysewski said.
The problems were resolved by the end of the quarter and full spirulina production at typical historical levels was renewed early in January, he said.
In addition, Cyanotech disclosed in a Securities and Exchange filing yesterday that it has applied to its current senior debt holder for additional funds of about $1 million on its existing senior debt, which is under a U.S. Department of Agriculture Rural Development program.
Cyanotech said it has received preliminary approval for the extra funds, and expects to receive the money by March 31.
Cyanotech said it applied for the additional funds primarily to partially offset significant one-time spending on administrative matters, particularly spending related to the restatement, and spending caused by astaxanthin and spirulina production shortfalls.