Cyanotech Reports Financial Results for the Second Quarter and First Six Months of Fiscal 2022

KAILUA KONA, Hawaii--(BUSINESS WIRE)-- Cyanotech Corporation (Nasdaq Capital Market: CYAN), a world leader in microalgae-based, high-value nutrition and health dietary supplement products, announced financial results for the second quarter and first six months of fiscal year 2022, ended September 30, 2021.

Commenting on the second quarter fiscal 2022 results, Cyanotech’s Chief Executive Officer, Gerald R. Cysewski, Ph.D., said: “We continued to experience weather and atmospheric conditions that allowed sustained cultivation and production metrics above trend. While we have not been immune from the supply chain disruptions being seen across the globe, we have been able to minimize their impact to date. Demand for our products remains strong.”

Second Quarter Fiscal 2022

Cyanotech reported net sales of $9,419,000 for the second quarter of fiscal 2022 compared to $8,571,000 for the second quarter of fiscal 2021, an increase of 10%. Gross profit was $3,762,000, with gross profit margin of 39.9%, compared to gross profit of $3,301,000, with gross profit margin of 38.5%. Operating income for the second quarter of fiscal 2022 was $1,082,000 compared to $282,000 in the same period of the prior year. Net income for the current fiscal quarter was $970,000, or $0.15 per diluted share, compared to net income of $155,000, or $0.03 per diluted share, for the same period of the prior year.

First Six Months Fiscal 2022

Cyanotech reported net sales of $18,383,000 for the first six months of fiscal 2022 compared to $15,923,000 for the same period in fiscal 2021, an increase of 15%. Gross profit was $7,434,000, with gross profit margin of 40.4%, compared to gross profit of $6,276,000, with gross profit margin of 39.4%. Operating income for the first six months of fiscal 2022 was $1,701,000 compared to $550,000 in the same period of the prior year. Net income for the first six months of fiscal 2022 was $1,491,000, or $0.24 per diluted share, compared to net income of $293,000, or $0.05 per diluted share, for the same period of the prior year.

Trailing Twelve Months

For the trailing twelve months ended September 30, 2021, compared to the trailing twelve months ended September 30, 2020, net sales were $34,806,000 compared to $32,060,000. Gross profit was $12,275,000, with gross profit margin of 35.3%, compared to $12,238,000 and 38.2%. Net income was $2,117,000, or $0.34 per diluted share, compared to net income of $586,000, or $0.10 per diluted share.

Please review the Company’s Form 10-Q for the period ended September 30, 2021 for more detailed information.

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— Cyanotech will host a virtual broadcast at 8:00 PM EST on Thursday, November 11, 2021 to respond to questions about its operating results and other topics of interest. Interested parties are asked to submit questions to questions@cyanotech.com before 12 p.m. (noon) EST on Thursday, November 11, 2021. The Company will respond only to relevant questions relating to the Company’s second quarter fiscal 2022 financial performance and will not be accepting any questions or comments during the broadcast.

To join the broadcast, please browse http://cyanotech.com/meet approximately five minutes prior to the start time.

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About Cyanotech — Cyanotech Corporation, a world leader in microalgae technology for more than 30 years, produces BioAstin® Hawaiian Astaxanthin® and Hawaiian Spirulina Pacifica®. These all-natural, dietary ingredients and supplements leverage our experience and reputation for quality, building nutritional brands which promote health and well-being. The Company’s mission is to fulfill the promise of whole health through Hawaiian microalgae. Cyanotech’s BioAstin® offers superior antioxidant activity which supports skin, eye and joint health, as well as recovery from exercise*. Cyanotech's Spirulina products offer nutrition that supports cardiovascular health and immunity*. All Cyanotech products are produced from microalgae grown at our 96-acre facility in Kona, Hawaii using patented and proprietary technology and are Generally Recognized as Safe (“GRAS”) for use in food products. Cyanotech sells its products direct to consumers at retail locations in the United States and online at www.nutrex-hawaii.com and also distributes to dietary supplement, nutraceutical and cosmeceutical manufacturers and marketers. The Company is regulated by the Food and Drug Administration. Visit www.cyanotech.com for more information.

*These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure or prevent any disease.

“Safe Harbor” Statement under the U.S. Private Securities Litigation Reform Act of 1995 Besides statements of present fact and historical fact, this press release may contain forward-looking statements. Forward-looking statements relate to the future and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by forward-looking statements. We caution against relying on forward-looking statements. Important factors that could change actual, future results include: changes in sales levels to our largest customers, weather patterns in Hawaii, production problems, risks associated with new products, foreign exchange fluctuations, and availability of financing, as well as national and global political, economic, business, competitive, market and regulatory conditions. Other factors are more fully detailed in the Company’s annual Form 10-K filings with the Securities and Exchange Commission.

Financial Tables Follow: The following tables do not contain footnotes or other information contained in the Company’s Form 10-Q for the second quarter fiscal 2022 ended September 30, 2021, which can be found on the Cyanotech website (www.cyanotech.com) under Investors>Investor Filings upon filing. As such, the following Financial Tables are provided only as a guide and other factors are more fully detailed in the Company’s annual Form 10-K filings with the Securities and Exchange Commission.

CYANOTECH CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts) (Unaudited)
		September 30, 2021				March 31, 2021
ASSETS
Current assets:
Cash		$	2,134			$	3,767
Accounts receivable, net of allowance for doubtful accounts of $113 as of September 30, 2021 and $32 as of March 31, 2021			3,077				2,436
Inventories, net			9,808				8,415
Prepaid expenses and other current assets			339				488
Total current assets			15,358				15,106
Equipment and leasehold improvements, net			11,901				12,136
Operating lease right-of-use assets, net			3,500				3,517
Other assets			118				120
Total assets		$	30,877			$	30,879
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	1,833			$	2,287
Accrued expenses			1,250				844
Customer deposits			110				124
Operating lease obligations, current portion			373				343
Line of credit			350				1,000
Current maturities of long-term debt			731				1,210
Total current liabilities			4,647				5,808
Long-term debt, less current maturities			4,468				4,823
Long-term operating lease obligations			3,125				3,175
Other long-term liabilities			24				32
Total liabilities			12,264				13,838
Commitments and contingencies
Stockholders’ equity:
Preferred stock of $0.01 par value, authorized 10,000,000 shares; no shares issued and outstanding			—				—
Common stock of $0.02 par value, authorized 50,000,000 shares; issued and outstanding 6,138,728 shares at September 30, 2021 and 6,116,073 shares at March 31, 2021			123				122
Additional paid-in capital			33,347				33,267
Accumulated deficit			(14,857	)			(16,348	)
Total stockholders’ equity			18,613				17,041
Total liabilities and stockholders’ equity		$	30,877			$	30,879

CYANOTECH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited)
		Three Months Ended September 30,								Six Months Ended September 30,
		2021				2020				2021				2020
Net sales		$	9,419			$	8,571			$	18,383			$	15,923
Cost of sales			5,657				5,270				10,949				9,647
Gross profit			3,762				3,301				7,434				6,276
Operating expenses:
General and administrative			1,422				1,472				2,768				2,800
Sales and marketing			1,131				1,374				2,681				2,618
Research and development			127				173				284				308
Total operating expenses			2,680				3,019				5,733				5,726
Income from operations			1,082				282				1,701				550
Interest expense, net			(101	)			(121	)			(196	)			(251	)
Income before income taxes			981				161				1,505				299
Income tax expense			11				6				14				6
Net income		$	970			$	155			$	1,491			$	293
Net income per share:
Basic		$	0.16			$	0.03			$	0.24			$	0.05
Diluted		$	0.15			$	0.03			$	0.24			$	0.05
Shares used in calculation of net income per share:
Basic			6,130				6,054				6,124				6,042
Diluted			6,315				6,163				6,312				6,147

 

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Bruce Russell

(310) 346-6131

brussell@cyanotech.com

Source: Cyanotech Corporation