The corporation has reported a net income of $113,000, or $0.01 per diluted share, on sales of $2,707,000 for the first quarter of fiscal 2005. This represents a year-on-year improvement, with an increase in sales of 11 per cent from the $2,428,000 reported for the same period in 2003, and a net income increase of $254,000 from the net loss of $141,000 reported last year.
However, compared to the fourth quarter of fiscal 2004, sales were lower by $583,000, down from $3,290,000.
The company blamed this downturn on unfulfilled orders of the dietary supplement spirulina, stating that certain spirulina products were in short supply because of poor weather conditions.
"For the period April through June 2004, we experienced an unprecedented level of rainfall during which the facility at Keahole Point received 383 per cent of normal levels of rain," said the company.
It claimed this deluge had caused a nutrient imbalance in the culture ponds, negatively impacting spirulina production and pushing up production costs because of an increased need for nutrients.
Gerald Cysewski, the company's chairman, president and CEO, acknowledged his frustration at these results, especially after the positive tone of Cyanotech's recently published annual report, but hoped that better weather and increased product demand would lead to an up-turn in the company's fortunes.
"We are disappointed with the quarter's results that mark a departure from our recent trend of sequential quarterly increases in revenue and net income," said Cysewski. "But, compared to the first quarter of the prior fiscal year, we have increased revenues, maintained control of our expenses and recorded net income. At the end of the first quarter of fiscal 2005, the weather-related difficulties are largely behind us and demand for our products continues to grow.
In its annual report, published last month, Cyanotech said it hoped to benefit from growing public awareness of the health benefits of its products to boost profits during fiscal 2005.
The company manufactures its products in Hawaii but markets them worldwide, generating 53 per cent, 54 per cent and 47 per cent of its revenues outside of the United States for each of the years ending 31 March, 2004, 2003 and 2002, respectively.