Cyanotech Turns Profitable in 1Q

Astaxanthin and spirulina supplier Cyanotech Corp. (NASDAQ:CYAN) started its new fiscal year in the black, reporting positive net earnings for first quarter (1Q) fiscal 2009 (FY09) after a string on quarterly losses. Revenues grew 43 percent to $3.7 million and gross profit margin rose to 35 percent from a 29-percent margin a year ago. This led to net earnings of $0.3 million, or $0.05 per diluted share, compared to net loss of $0.4 million, or ($0.07) per diluted share in 1Q last year.
Spirulina sales, both bulk and packaged, were up 33 percent over a year ago, while natural astaxanthin sales also jumped, with bulk climbing 49 percent and packaged sales soaring a whopping 126 percent.
While lauding its team's improvements, such as improved operating expenses, management was quick to concede the successful quarter in no way indicates the companies operational issues are fully solved and turned around.
"We expect continued pressure on input costs going forward and this could cause margins to decline in future periods," said Andrew Jacobsen, president and CEO, noting riing fuel and energy costs have taken a toll, as it has on all companies. "After careful evaluation, we have determined that we can no longer absorb fuel and energy increases, especially being located in Hawaii, which has some of the highest energy costs in the world. We therefore will be instituting a price increase across all our products." He said the increase should be fully implemented by the middle of the 3Q FY09.

Source: NASDAQ. August 15, 2008.