CYAN Cyanotech Corp

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 fourth quarter and fiscal year 2023, ended March 31, 2023.

Commenting on the fiscal year results (changes shown vs. fiscal 2022), Cyanotech’s President and Chief Executive Officer, Matthew K. Custer, said:

“Fiscal year 2023 was a challenging year as a result of a number of macroeconomic events and timing of sales. Consumers shifted their spend from goods to experiences and services. Lower sales in the bulk business were due in part to inventory adjustments after the global supply chain issues eased and lower sales in the e-commerce business were driven by a difference in strategy implemented by our third-party distributor.”

“Our manufacturing operations produced consistent and high-quality algae, however, the cost per kilo for spirulina in particular was a drag on the gross margin as we reduced production volume resulting in a higher cost per kilo to align with consumer demand.”

“In the fourth quarter of fiscal year 2023, the Company generated cash flow of $583,000 from operations as a result of the cash saving initiatives that we implemented in the second quarter, including slowing production and reducing headcount.”

“Despite the disappointing sales figures, I am hopeful for the future. We are well positioned to meet customer needs in the growing market for naturally derived high value nutritional products.”

Fiscal Year 2023

Cyanotech reported net sales of $23,178,000 for fiscal 2023 compared to $35,968,000 in fiscal 2022, a decrease of 35.6%. Gross profit was $7,259,000, with gross profit margin of 31.3%, compared to gross profit of $13,566,000 and gross profit margin of 37.7%. Operating loss was $2,920,000 compared to operating income of $2,574,000.

Net loss was $3,440,000 or $0.55 loss per share, compared to net income of $2,154,000 or $0.35 earnings per share.

Fourth Quarter Fiscal 2023

Cyanotech reported net sales of $5,391,000 for the fourth quarter of fiscal year 2023 compared to $8,126,000 in the fourth quarter of fiscal 2022, a decrease of 33.7%. Gross profit was $1,387,000 with gross profit margin of 25.7%, compared to gross profit of $2,894,000 and gross profit margin of 35.6% in the fourth quarter of fiscal 2022. Operating loss was $1,255,000 compared to operating income of $364,000 in the fourth quarter of fiscal 2022. Net loss was $1,430,000, or $0.23 loss per share, compared to net income of $277,000, or $0.04 earnings per share in the fourth quarter of fiscal 2022.

Please review the Company’s Form 10-K for the period ended March 31, 2023 for more detailed information.

— Cyanotech will host a broadcast at 8:00 PM EDT on Wednesday, June 28, 2023, 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. EDT on Wednesday, June 28, 2023. The Company will respond only to relevant questions relating to the Company’s fourth quarter and fiscal 2023 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 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, availability of financing, and our ability to continue as a going concern, 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-K for the fiscal year ended March 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

CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

March 31,

 

2023

2022

 

(in thousands, except share data)

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash

$

974

 

$

2,589

 

Accounts receivable, net of allowance for doubtful accounts of $64 in 2023 and $67 in 2022

 

1,331

 

 

3,664

 

Inventories

 

10,707

 

 

9,466

 

Prepaid expenses and other current assets

 

484

 

 

545

 

Total current assets

 

13,496

 

 

16,264

 

Equipment and leasehold improvements, net

 

11,366

 

 

11,885

 

Operating lease right-of-use assets, net

 

4,776

 

 

3,787

 

Other assets

 

90

 

 

109

 

Total assets

$

29,728

 

$

32,045

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

$

1,021

 

$

2,362

 

Accrued expenses

 

1,101

 

 

1,412

 

Customer deposits

 

89

 

 

164

 

Operating lease obligations, current portion

 

483

 

 

393

 

Line of credit

 

1,540

 

 

—

 

Line of credit – related party

 

500

 

 

—

 

Current maturities of long-term debt

 

3,469

 

 

490

 

Total current liabilities

 

8,103

 

 

4,821

 

 

 

 

 

 

 

 

Long-term debt, less current maturities

 

1,000

 

 

4,336

 

Long-term operating lease obligations

 

4,275

 

 

3,386

 

Other long-term liabilities

 

3

 

 

15

 

Total liabilities

 

13,381

 

 

12,558

 

 

 

 

 

 

 

 

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 6,271,971 shares at March 31, 2023 and 6,202,223 shares at March 31, 2022

 

125

 

 

124

 

Additional paid-in capital

 

33,856

 

 

33,557

 

Accumulated deficit

 

(17,634

)

 

(14,194

)

Total stockholders’ equity

 

16,347

 

 

19,487

 

Total liabilities and stockholders’ equity

$

29,728

 

$

32,045

 

 

CYANOTECH CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

 

 

 

 

Years ended March 31,

 

2023

2022

2021

 

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

Net sales

$

23,178

 

$

35,968

 

$

32,345

 

Cost of sales

 

15,919

 

 

22,402

 

 

21,228

 

Gross profit

 

7,259

 

 

13,566

 

 

11,117

 

Operating expenses:

 

 

 

 

 

 

 

 

 

General and administrative

 

4,659

 

 

5,367

 

 

4,876

 

Sales and marketing

 

4,750

 

 

4,913

 

 

5,518

 

Research and development

 

770

 

 

712

 

 

639

 

Total operating expense

 

10,179

 

 

10,992

 

 

11,033

 

(Loss) income from operations

 

(2,920

)

 

2,574

 

 

84

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(502

)

 

(392

)

 

(550

)

Gain on extinguishment of debt

 

—

 

 

—

 

 

1,389

 

Total other income (expense), net

 

(502

)

 

(392

)

 

839

(Loss) income before income taxes

 

(3,422

)

 

2,182

 

 

923

 

Income tax expense

 

(18

)

 

(28

)

 

(3

)

Net (loss) income

$

(3,440

)

$

2,154

 

$

920

 

Net (loss) income per share:

 

 

 

 

 

 

 

 

 

Basic

$

(0.55

)

$

0.35

 

$

0.15

Diluted

$

(0.55

)

$

0.35

 

$

0.15

Shares used in calculation of net (loss) income per share:

 

 

 

 

 

 

 

 

 

Basic

 

6,244

 

 

6,157

 

 

6,070

 

Diluted

 

6,244

 

 

6,168

 

 

6,079

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230620870993/en/

Bruce Russell (310) 346-6131 brussell@cyanotech.com