Flexibility boosts Cyanotech's 3Q income

- Last updated on GMT

Related tags: Generally accepted accounting principles, Revenue

Cyanotech Corporation has reported net income of $326,000 ($0.02
per diluted share) for 3Q 2005, an almost three-fold increase on
$109,000 ($0.01 per dilute share) in 3Q 2004.

Chairman, president and CEO Gerald Cysewski attributed the rise to efforts to increase flexibility in the company's​ production systems to meet changing market conditions, including the conversion of six ponds from production of Spirulina to astanxanthin in December 2004.

Net sales for the period were $2,017,000, up 5 percent on $1,840,000 in 3Q 2004, despite a dip in demand for its natural astaxanthin product NatuRose during 2Q 2005 due to the impact of typhoons in Japan on its customers' fish farming businesses and the competitive pricing of synthetic astaxanthin from Europe.

The company said that sales of Spirulina Pacifica and BioAstin offset the poor sales performance of NatuRose over the period but as Spirulina is a lower margin product this change in product mix contributed to a decrease in gross profit margin to 37 percent, compared to 39 percent last year.

The company had originally intended to convert ten ponds to astaxanthin production​, but decided to defer from converting the remaining four until astaxanthin sales have picked up.

At the time it said it expected the astaxanthin slump to continue throughout 3Q and 4Q 2005, but is confident that demand will rebound to previous levels in the future.

"Moving forward, we remain confident in our ability to leverage our improved operations to greater advantage in the markets in which we compete,"​ said Cysewski.

Related topics: Antioxidants/carotenoids

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