Cyanotech Reports Financial Results for the Third Quarter and First Nine Months of Fiscal 2021

Rhea-AI Summary

Cyanotech Corporation (CYAN) reported financial results for Q3 and the first nine months of fiscal 2021. Q3 net sales decreased to $6.985 million, down by 6.9% year-over-year. Gross profit also fell to $2.071 million with a margin of 29.6%, a decline attributed to high-cost inventory. However, net income rose to $827,000, or $0.13 per diluted share, mainly due to Paycheck Protection Program loan forgiveness. For nine months, total sales were $22.907 million, while gross profit decreased to $8.347 million with a 36.4% margin.

Positive

• Net income improved to $827,000 due to loan forgiveness.
• E-commerce sales performing well amid consumer shifts.

Negative

• Q3 net sales decreased by $519,000, or 6.9%.
• Gross profit margin fell from 38.3% to 29.6%.
• Operating loss of $441,000 compared to prior year's income.

Cyanotech Corporation (Nasdaq Capital Market: CYAN), a world leader in microalgae-based, high-value nutrition and health products, announced financial results for the third quarter and first nine months of fiscal year 2021, ended December 31, 2020.

Cyanotech’s Chief Executive Officer, Gerald R. Cysewski, Ph.D., said: “Our current quarter results were affected by the timing of product received by customers from our carriers, as well as lower gross profit due to the sale of higher cost inventory. Our e-commerce sales continue to perform well as consumers' shopping preferences have shifted.”

Third Quarter Fiscal 2021

Cyanotech reported net sales of $6,985,000 for the third quarter of fiscal 2021 compared to $7,504,000 for the third quarter of fiscal 2020. Overall sales were lower by $519,000, or 6.9%, due to the timing of shipments received by customers. Gross profit was $2,071,000, with gross profit margin of 29.6%, compared to gross profit of $2,877,000 and gross profit margin of 38.3%. Gross profit for the quarter decreased by 8.7 percentage points due to the sale of higher cost astaxanthin inventory from the prior year and current year higher spirulina costs per kilo driven by lower production. Operating loss for the third quarter of fiscal 2021 was ($441,000) compared to operating income of $367,000 in the third quarter of the prior year.

Net income was $827,000, or $0.13 per diluted share, compared to a net income of $171,000, or $0.03 per diluted share, with the increase primarily due to the forgiveness of the loan under the Paycheck Protection Program in the amount of $1,389,000, including accrued interest of $8,000.

Nine Months Fiscal 2021

For the nine months ended December 31, 2020, Cyanotech reported net sales of $22,907,000 compared to $23,265,000 for the same period in fiscal 2020. Gross profit was $8,347,000, with gross profit margin of 36.4%, compared to gross profit of $9,615,000 and gross profit margin of 41.3%. Operating income was $109,000 compared to $825,000 in the prior year. Net income was $1,121,000, or $0.18 per diluted share, compared to a net income of $266,000, or $0.04 per diluted share.

Trailing Twelve Months

For the trailing twelve months ended December 31, 2020, compared to the trailing twelve months ended December 31, 2019, net sales were $31,541,000 compared to $29,323,000. Gross profit was $11,431,000, with gross profit margin of 36.2%, compared to $11,844,000 and 40.4%. Net income was $1,242,000, or $0.20 per diluted share, compared to net loss of ($1,297,000), or ($0.22) per diluted share.

Please review the Company’s Form 10-Q for the period ended December 31, 2020 for more detailed information.

---------------

— Cyanotech will host a virtual broadcast at 8:00 PM EST on Friday, February 12, 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 Friday, February 12, 2021. The Company will respond only to relevant questions relating to the Company’s third quarter fiscal 2021 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.

---------------

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 rele

FAQ

What were Cyanotech's financial results for Q3 2021?

Cyanotech reported net sales of $6.985 million for Q3 2021, down 6.9% from Q3 2020. Gross profit fell to $2.071 million with a margin of 29.6%.

How did Cyanotech perform in the first nine months of fiscal 2021?

For the first nine months, Cyanotech reported net sales of $22.907 million, compared to $23.265 million in the same period last year.

What impact did loan forgiveness have on Cyanotech's net income?

Loan forgiveness from the Paycheck Protection Program contributed to an improved net income of $827,000, or $0.13 per diluted share in Q3.

What factors contributed to the decline in Cyanotech's gross profit?

The decline in gross profit was attributed to the sale of higher cost inventory and increased production costs for spirulina.