Cyanotech loses
$527,000 in quarter
as sales fall 9.1%

By Russ Lynch
Star-Bulletin

Cyanotech Corp. today reported a net loss of $527,000 for the three months through June 30, the first quarter of its 2000 fiscal year. Equal to 4 cents a share, the loss was an improvement from a loss of $671,000, or 5 cents a share, in the year-earlier quarter.

First-quarter sales of $1.6 million were down 9.1 percent from $1.76 million.

Although its overall sales were down, the company reported a 10 percent increase in sales of its Spirulina Pacifica dietary supplement products.

Cyanotech said it is beginning to increase its production of natural astaxanthin, a red pigment used to increase the color in the flesh of pond-raised fish and shrimp.

Cyanotech recently signed a production and marketing agreement for astaxanthin with a large Norwegian firm, which will result in a joint venture to build and operate a new astaxanthin production facility in Kona.

The company said it is also working on a mosquito-killing product.

Gerald R. Cysewski, Cyanotech chairman, president and chief executive, said the company has reduced its costs by a $181,000 reduction in inventory and a general downsizing that began in the last quarter of its 1999 fiscal year.

Based in Kailua-Kona, Cyanotech makes all its products from algae grown in ponds of seawater pumped in cold from the deep water off the coast.

The company's Nasdaq-traded stock closed unchanged at $1.12 on Wall Street.