Cyanotech Corp., which has been ramping up efforts to sell its neutraceutical products, said today its net loss marginally widened in the 2003 fiscal second quarter despite a slight increase in sales. Cyanotech loss grows
despite better salesThe Kona-based neutraceutical firm said
cost cutting should pay off soonStar-Bulletin staff
The Kona company, a maker of nutritional products Spirulina and BioAstin out of microalgae as well as the animal feed NatuRose, said it had a loss of $540,000, or 3 cents a share, compared with a loss of $509,000, or 3 cents a share, a year ago. Net sales were $2.02 million compared with $1.95 million a year ago.
Cyanotech said it has been working with industry-leading cosmetic manufacturers, pharmaceutical companies offering branded nutraceuticals, direct marketing companies and natural food sector supplement makers to integrate Cyanotech's natural astaxanthin products into the other companies' nutraceutical and cosmetic formulations. Cyanotech said so far its natural astaxanthin products have been introduced in products from Twinlab and Sea & Ski and that additional relationships are expected during the next six months.
The aquaculture company also said its new reworked 30-minute infomercial for BioAstin began airing Oct. 23 in the Southern California, Phoenix, and Portland, Ore., markets. It said the infomercial focuses on joint relief provided by BioAstin that can aid sufferers of carpal tunnel syndrome and rheumatoid arthritis, among other maladies. Cyanotech said full results of the market test won't be known until late November.
Meanwhile, Cyanotech said a capital infusion it received earlier this month relieved some of the financial uncertainties hanging over the company. It sold $1.25 million in 10 percent convertible subordinated debentures, due Sept. 30, 2004, to retire $1.238 million due the end of this month from previous debentures. The company also completed a private placement of $300,000 in common stock.
"The recent financing enabled Cyanotech to restructure certain obligations that were coming due and provides an improved financial base of support for the company as it pursues growth opportunities," said Gerald R. Cysewski, chairman, president and chief executive officer of Cyanotech. "Additionally, we implemented cost-cutting measures during the second quarter that are expected to reduce operating expenses during the third quarter and beyond. These actions do not have a significant impact on the operations of the company and were undertaken to pare expense while pursuing growth."
Cyanotech said its second-quarter gross profit margin, which is the percentage of sales left after subtracting manufacturing costs, improved to 28 percent from 25 percent a year ago but decreased from 39 percent last quarter due to increased demand during the second quarter for Certified Organic Spirulina, which has a higher production cost.
Cyanotech said sales in the second quarter to its largest customer, Spirulina International BV, were 14 percent of total sales compared with 8 percent a year earlier. Spirulina, unlike BioAstin, is not a single compound but a whole food.
The company also said NatuRose, which is used to impart a natural pinkish hue to farm-raised fish and shrimp, reached record levels in the second quarter through its Japanese subsidiary, Cyanotech Japan YK.
