CYAN Cyanotech Corp

Cyanotech Corporation (Nasdaq Capital Market:CYAN), a world leader in microalgae-based, high-value nutrition and health products, today announced financial results for the first quarter of fiscal 2010, ended June 30, 2009.

First Quarter Fiscal 2010

Revenues for the first quarter of fiscal 2010 increased 9% to $4,021,000, compared to revenues of $3,701,000 for the first quarter of fiscal 2009. Gross profit was $1,733,000, with gross profit margin of 43%, in the current quarter compared to a gross profit of $1,304,000 and gross profit margin of 35% reported for the same quarter in 2009. Net income was $413,000, or $0.08 per diluted share, compared to $271,000, or $0.05 per diluted share for the first quarter of fiscal 2009.

Cash and cash equivalents were $953,000 at June 30, 2009 compared to the March 31, 2009 balance of $977,000. Working capital increased to $4,037,000 at June 30, 2009 compared to $3,892,000 at March 31, 2009.

“We are thrilled with Cyanotech’s performance this quarter, achieving the highest quarterly revenues in our history,” said Andrew H. Jacobson, President and CEO. “Sales were driven by the continued development of our BioAstin® Natural Astaxanthin franchise and a strong performance by our Hawaiian Spirulina Pacifica® brand. These results were made possible by the teamwork and commitment exhibited by every employee.”

The Company's continued focus on cost containment and improved productivity delivered strong margin growth, up 8 points over the prior-year period, and driving the 52% increase in net income.

“We are excited about fiscal 2010 and will continue to focus on sound business fundamentals. In addition, we will introduce a number of innovative products that will feature Hawaiian Spirulina Pacifica and BioAstin,” Mr. Jacobson concluded.

About Cyanotech — Cyanotech Corporation, a world leader in microalgae technology, produces BioAstin® Natural Astaxanthin and Hawaiian Spirulina Pacifica®—all natural, functional nutrients that leverage our experience and reputation for quality, building nutritional brands which promote health and well-being. Cyanotech's Spirulina products offer complete nutrition, and augment energy and immune response. They are FDA reviewed and accepted as Generally Recognized as Safe (GRAS) for use in food products. BioAstin's superior antioxidant activity and ability to support and maintain a natural anti-inflammatory response enhance skin, muscle and joint health. All Cyanotech products are produced from microalgae grown at its 90-acre facility in Kona, Hawaii using patented and proprietary technology. Cyanotech distributes to nutritional supplement, nutraceutical and cosmeceutical manufacturers and marketers in more than 40 countries worldwide. Cyanotech was the first microalgae company in the world to obtain quality management standards ISO 9001:2000 certification and is GMP-certified by the Natural Products AssociationTM. Visit www.cyanotech.com for more information.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995

Except for statements of historical fact, the statements in this press release are forward-looking. Such statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These factors include, but are not limited to, general economic conditions, forecasts of sales in future periods, changes in sales levels to our largest customers, weather patterns, production problems caused by contamination, risks associated with the acceptance of new products, competition, foreign exchange fluctuations, government regulation, and other factors more fully detailed in the Company’s recent Form 10-Q and 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 period ended June 30, 2010. As such the following Financial Tables are provided only as a guide and other factors are more fully detailed in the Company’s Form 10-Q and annual Form 10-K filings with the Securities and Exchange Commission.)

 

CYANOTECH CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS

(Dollars in thousands except par value and number of shares)

(Unaudited)

           

June 30, 2009

       

March 31, 2009

ASSETS Current assets: Cash and cash equivalents $ 953 $ 977 Accounts receivable, net of allowance for doubtful accounts of $14 at June 30, 2009 and March 31, 2009 2,292 1,785 Inventories 3,098 3,124 Prepaid expenses and other 105 110 Total current assets 6,448 5,996   Equipment and leasehold improvements, net 4,560 4,316 Other assets 459 475 Total assets $ 11,467 $ 10,787   LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Current maturities of long-term debt $ 586 $ 620 Customer deposits 23 — Accounts payable 1,108 1,040 Accrued expenses 694 444 Total current liabilities 2,411 2,104   Long-term debt, less current maturities 790 909 Total liabilities 3,201 3,013   Commitments and contingencies   Stockholders’ equity: Common stock of $0.02 par value, shares authorized 7,500,000; 5,245,770 shares issued and outstanding at June 30, 2009 and March 31, 2009 105 105 Additional paid-in capital 27,667 27,590 Accumulated deficit (19,506

)

 

(19,921 ) Total stockholders’ equity 8,266 7,774   Total liabilities and stockholders’ equity $ 11,467 $ 10,787  

CYANOTECH CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share amounts)

(Unaudited)

            Three Months Ended June 30, 2009         2008   NET SALES $ 4,021 $ 3,701 COST OF PRODUCT SALES 2,288 2,397 Gross Profit 1,733 1,304   OPERATING EXPENSES: General and administrative 896 709 Sales and marketing 322 267 Research and development 80 36 Total operating expenses 1,298 1,012   Income from operations 435 292   OTHER INCOME (EXPENSE): Interest expense, net (29 ) (42 ) Other income, net 17 10 Total other expense, net (12 ) (32 )   Income before income taxes 423 260   PROVISION (BENEFIT) FOR INCOME TAXES 10 (11 )   NET INCOME $ 413 $ 271   NET INCOME PER SHARE: Basic $ 0.08 $ 0.05 Diluted $ 0.08 $ 0.05   SHARES USED IN CALCULATION OF NET INCOME PER SHARE: Basic 5,246 5,242 Diluted 5,294 5,242