Cyanotech Reports Financial Results for the Third Quarter and First Nine Months of Fiscal 2024
- None.
- Decrease in net sales for the third quarter and first nine months of fiscal year 2024
- Operating loss and net loss increased compared to the same period in the prior year
Insights
Examining Cyanotech Corporation's recent financial results reveals a contraction in net sales and an increase in operating loss, which are indicative of challenges within the microalgae-based nutrition industry. The company's efforts to revitalize their sales and marketing team, including the hiring of a Chief Commercial Officer, suggests a strategic pivot towards strengthening their market position. The emphasis on premium quality and competitive advantages, as well as the alignment with consumer demand for sustainable and responsibly sourced products, could potentially mitigate the impact of the macroeconomic environment on their sales performance.
However, the reported decrease in Spirulina bulk sales and the shift of consumers towards private label brands due to cost savings reflect a broader trend of price sensitivity in the market. This could lead to increased competition and pressure on margins for companies like Cyanotech that focus on premium products. The company's gross profit margin decrease, although slight, is a concern as it may signal a need for cost management and operational efficiency improvements.
From a financial perspective, Cyanotech's increased net loss and operating loss year-over-year are concerning metrics that investors should closely monitor. The decline in gross profit margin, while relatively small, is still significant in the context of the company's overall financial health. The reported figures suggest that Cyanotech is facing headwinds that are affecting its profitability, which could be attributed to both internal and external factors.
The stock market typically reacts to such financial results with increased volatility in the company's share price. Investors will need to weigh the company's long-term growth strategies against the current financial setbacks to assess the potential for recovery. The management's proactive approach to addressing sales challenges and their focus on sustainable practices may be seen as positive indicators for future performance, but the company will need to demonstrate tangible improvements in financial outcomes to regain investor confidence.
From a sustainability standpoint, Cyanotech's commitment to naturally farmed microalgae and its practices of sourcing from pristine Hawaiian waters are significant. These practices align with growing consumer trends favoring environmentally responsible and locally sourced products. While this approach is commendable and may enhance brand value, it also comes with the challenge of maintaining cost-competitiveness in a market that is increasingly price-sensitive.
It is crucial for Cyanotech to effectively communicate the value of its sustainable practices to consumers who are trading down to more affordable options. The long-term benefits of building a loyal customer base that values sustainability could potentially outweigh the short-term financial pressures. However, the company must balance this with the need to remain financially viable in a competitive landscape. The ability to do so will likely have a significant impact on the company's future market share and financial stability.
Commenting on the third quarter fiscal year 2024 results, Cyanotech’s President and Chief Executive Officer, Matthew K. Custer, said:
“The macroeconomic environment led to lower sales across the portfolio on a year-to-date basis, being driven particularly by Spirulina bulk sales. Industry data shows consumers are not pulling back from dietary supplements, but they have begun trading down to private label brands to save on costs. The market for bulk material is increasingly price sensitive with many companies sourcing lower priced international ingredients.”
“In the face of these challenges, we have revitalized our sales and marketing team, starting with the addition of a Chief Commercial Officer this past August, and strengthening the sales team. We have focused on enhancing our customer messaging on our premium quality and competitive advantages. Our naturally farmed microalgae from our location in
Third Quarter Fiscal 2024
Cyanotech reported net sales of
First Nine Months of Fiscal 2024
Cyanotech reported net sales of
Trailing Twelve Months
For the trailing twelve months ended December 31, 2023, compared to the trailing twelve months ended December 31, 2022, net sales were
Please review the Company’s Form 10-Q for the period ended December 31, 2023 for more detailed information.
— Cyanotech will host a virtual broadcast at 8:00 PM ET on Friday, February 9, 2024 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) ET on Friday, February 9, 2024. The Company will respond only to relevant questions relating to the Company’s third quarter fiscal 2024 financial performance and will not be accepting any questions or comments during the broadcast.
To join the broadcast, please browse https://www.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,
*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
Financial Tables Follow: The following tables do not contain footnotes or other information contained in the Company’s Form 10-Q for the third quarter fiscal 2024 ended December 31, 2023, 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) |
||||||||
|
|
December 31,
|
|
March 31,
|
||||
ASSETS |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash |
|
$ |
661 |
|
|
$ |
974 |
|
Accounts receivable, net of allowance for credit losses of |
|
|
2,036 |
|
|
|
1,331 |
|
Inventories |
|
|
9,124 |
|
|
|
10,707 |
|
Prepaid expenses and other current assets |
|
|
464 |
|
|
|
484 |
|
Total current assets |
|
|
12,285 |
|
|
|
13,496 |
|
|
|
|
|
|
|
|
||
Equipment and leasehold improvements, net |
|
|
10,434 |
|
|
|
11,366 |
|
Operating lease right-of-use assets, net |
|
|
4,409 |
|
|
|
4,776 |
|
Other assets |
|
|
126 |
|
|
|
90 |
|
Total assets |
|
$ |
27,254 |
|
|
$ |
29,728 |
|
|
|
|
|
|
|
|
||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
1,389 |
|
|
$ |
1,021 |
|
Accrued expenses |
|
|
753 |
|
|
|
1,101 |
|
Customer deposits |
|
|
70 |
|
|
|
89 |
|
Operating lease obligations, current portion |
|
|
517 |
|
|
|
483 |
|
Short term debt - bank |
|
|
1,360 |
|
|
|
— |
|
Line of credit – bank |
|
|
— |
|
|
|
1,540 |
|
Line of credit – related party |
|
|
1,250 |
|
|
|
500 |
|
Current maturities of long-term debt |
|
|
3,199 |
|
|
|
3,369 |
|
Total current liabilities |
|
|
8,538 |
|
|
|
8,103 |
|
|
|
|
|
|
|
|
||
Long-term debt, less current maturities |
|
|
1,000 |
|
|
|
1,000 |
|
Long-term operating lease obligations |
|
|
3,883 |
|
|
|
4,275 |
|
Other long-term liabilities |
|
|
— |
|
|
|
3 |
|
Total liabilities |
|
|
13,421 |
|
|
|
13,381 |
|
|
|
|
|
|
|
|
||
Commitments and contingencies |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Stockholders’ equity: |
|
|
|
|
|
|
||
Preferred stock of |
|
|
— |
|
|
|
— |
|
Common stock of |
|
|
138 |
|
|
|
125 |
|
Additional paid-in capital |
|
|
34,515 |
|
|
|
33,856 |
|
Accumulated deficit |
|
|
(20,820 |
) |
|
|
(17,634 |
) |
Total stockholders’ equity |
|
|
13,833 |
|
|
|
16,347 |
|
Total liabilities and stockholders’ equity |
|
$ |
27,254 |
|
|
$ |
29,728 |
|
CYANOTECH CORPORATION |
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
(In thousands, except per share amounts) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
5,582 |
|
|
$ |
5,891 |
|
|
$ |
17,101 |
|
|
$ |
17,786 |
|
Cost of sales |
|
|
3,933 |
|
|
|
4,127 |
|
|
|
11,831 |
|
|
|
11,914 |
|
Gross profit |
|
|
1,649 |
|
|
|
1,764 |
|
|
|
5,270 |
|
|
|
5,872 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative |
|
|
947 |
|
|
|
1,021 |
|
|
|
3,381 |
|
|
|
3,631 |
|
Sales and marketing |
|
|
1,387 |
|
|
|
1,041 |
|
|
|
4,048 |
|
|
|
3,351 |
|
Research and development |
|
|
163 |
|
|
|
106 |
|
|
|
530 |
|
|
|
556 |
|
Total operating expenses |
|
|
2,497 |
|
|
|
2,168 |
|
|
|
7,959 |
|
|
|
7,538 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss from operations |
|
|
(848 |
) |
|
|
(404 |
) |
|
|
(2,689 |
) |
|
|
(1,666 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net |
|
|
(172 |
) |
|
|
(186 |
) |
|
|
(495 |
) |
|
|
(333 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss before income taxes |
|
|
(1,020 |
) |
|
|
(590 |
) |
|
|
(3,184 |
) |
|
|
(1,999 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income tax expense |
|
|
— |
|
|
|
8 |
|
|
|
2 |
|
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss |
|
$ |
(1,020 |
) |
|
$ |
(598 |
) |
|
$ |
(3,186 |
) |
|
$ |
(2,010 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
(0.16 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.50 |
) |
|
$ |
(0.32 |
) |
Diluted |
|
$ |
(0.16 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.50 |
) |
|
$ |
(0.32 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shares used in calculation of net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
6,554 |
|
|
|
6,272 |
|
|
|
6,404 |
|
|
|
6,235 |
|
Diluted |
|
|
6,554 |
|
|
|
6,272 |
|
|
|
6,404 |
|
|
|
6,235 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240208480525/en/
Felicia Ladin
(808) 334-9455
investorrelations@cyanotech.com
Source: Cyanotech Corporation
FAQ
What is the ticker symbol for Cyanotech Corporation?
What were the net sales for the third quarter of fiscal 2024?
What was the gross profit margin for the first nine months of fiscal 2024?
When will Cyanotech host a virtual broadcast to respond to questions?
