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Cyanotech posts third straight profitable quarter


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POSTED: Thursday, November 13, 2008

Cyanotech Corp., a Kona-based nutritional products company, said today that a reduction in operating expenses as well as increased spirulina and natural astaxanthin productivity and sales helped the company realize its third profitable quarter in a row.

Net income for the second quarter was $163,000, or 3 cents a share, compared with a loss of $344,000, or 7 cents a share, a year earlier. Revenue was up 26 percent to $3.3 million from $2.6 million.

“In the second quarter, our momentum continued to accelerate,” said Andrew H. Jacobson, Cyanotech’s president and chief executive.

After posting three straight years of fiscal losses, Cyanotech may have turned a corner. In addition to its most recent profit, the company posted a fourth-quarter profit of $181,000 and a first-quarter profit of $271,000.

“We saw the efforts of our new cultivation strategy begin to show benefits as we experienced increased productivity of 53.5 percent for spirulina and 34 percent for astaxanthin over the second quarter of fiscal 2008,” Jacobson said. “These gains, combined with our cost-containment efforts and strong top line, delivered a 79.4 percent increase in gross profit and a 13 point gross margin improvement over the prior-year period.”

However, Jacobson said that the company expects to see reduced productivity as it moves deeper into the cooler temperatures and reduced sunlight of winter.

“But we will stay focused on improving cultivation and productivity, containing costs and increasing sales and nutritional quality,” he said.

Cash and cash equivalents at Sept. 30 totaled $989,000 as compared to the balance of $1.1 million on March 31. Working capital was $3.4 million at Sept. 30 compared to $3.1 million on March 31.