Business Wire | Nov 10, 2021 08:00AM EST

Cyanotech Reports Financial Results for the Second Quarter and First Six Months of Fiscal 2022

Nov. 10, 2021

KAILUA KONA, Hawaii--(BUSINESS WIRE)--Nov. 10, 2021--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 second quarter and first six months of fiscal year 2022, ended September 30, 2021.

Commenting on the second quarter fiscal 2022 results, Cyanotech's Chief Executive Officer, Gerald R. Cysewski, Ph.D., said: "We continued to experience weather and atmospheric conditions that allowed sustained cultivation and production metrics above trend. While we have not been immune from the supply chain disruptions being seen across the globe, we have been able to minimize their impact to date. Demand for our products remains strong."

Second Quarter Fiscal 2022

Cyanotech reported net sales of $9,419,000 for the second quarter of fiscal 2022 compared to $8,571,000 for the second quarter of fiscal 2021, an increase of 10%. Gross profit was $3,762,000, with gross profit margin of 39.9%, compared to gross profit of $3,301,000, with gross profit margin of 38.5%. Operating income for the second quarter of fiscal 2022 was $1,082,000 compared to $282,000 in the same period of the prior year. Net income for the current fiscal quarter was $970,000, or $0.15 per diluted share, compared to net income of $155,000, or $0.03 per diluted share, for the same period of the prior year.

First Six Months Fiscal 2022

Cyanotech reported net sales of $18,383,000 for the first six months of fiscal 2022 compared to $15,923,000 for the same period in fiscal 2021, an increase of 15%. Gross profit was $7,434,000, with gross profit margin of 40.4%, compared to gross profit of $6,276,000, with gross profit margin of 39.4%. Operating income for the first six months of fiscal 2022 was $1,701,000 compared to $550,000 in the same period of the prior year. Net income for the first six months of fiscal 2022 was $1,491,000, or $0.24 per diluted share, compared to net income of $293,000, or $0.05 per diluted share, for the same period of the prior year.

Trailing Twelve Months

For the trailing twelve months ended September 30, 2021, compared to the trailing twelve months ended September 30, 2020, net sales were $34,806,000 compared to $32,060,000. Gross profit was $12,275,000, with gross profit margin of 35.3%, compared to $12,238,000 and 38.2%. Net income was $2,117,000, or $0.34 per diluted share, compared to net income of $586,000, or $0.10 per diluted share.

Please review the Company's Form 10-Q for the period ended September 30, 2021 for more detailed information.

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- Cyanotech will host a virtual broadcast at 8:00 PM EST on Thursday, November 11, 2021 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. (noon) EST on Thursday, November 11, 2021. The Company will respond only to relevant questions relating to the Company's second quarter fiscal 2022 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.

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About Cyanotech - Cyanotech Corporation, a world leader in microalgae technology for more than 30 years, produces BioAstin(r) Hawaiian Astaxanthin(r) and Hawaiian Spirulina Pacifica(r). 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(r) 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, and availability of financing, 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-Q for the second quarter fiscal 2022 ended September 30, 2021, 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

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

(Unaudited)

September March 31, 30, 2021 2021

ASSETS

Current assets:

Cash $ 2,134 $ 3,767

Accounts receivable, net of allowance for doubtfulaccounts of $113 as of September 30, 2021 and $32 3,077 2,436 as of March 31, 2021

Inventories, net 9,808 8,415

Prepaid expenses and other current assets 339 488

Total current assets 15,358 15,106



Equipment and leasehold improvements, net 11,901 12,136

Operating lease right-of-use assets, net 3,500 3,517

Other assets 118 120

Total assets $ 30,877 $ 30,879



LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable $ 1,833 $ 2,287

Accrued expenses 1,250 844

Customer deposits 110 124

Operating lease obligations, current portion 373 343

Line of credit 350 1,000

Current maturities of long-term debt 731 1,210

Total current liabilities 4,647 5,808



Long-term debt, less current maturities 4,468 4,823

Long-term operating lease obligations 3,125 3,175

Other long-term liabilities 24 32

Total liabilities 12,264 13,838



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, authorized50,000,000 shares; issued and outstanding 6,138,728 123 122 shares at September 30, 2021 and 6,116,073 sharesat March 31, 2021

Additional paid-in capital 33,347 33,267

Accumulated deficit (14,857 ) (16,348 )

Total stockholders' equity 18,613 17,041

Total liabilities and stockholders' equity $ 30,877 $ 30,879

CYANOTECH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

Three Months Ended September 30,

Six Months Ended September 30,

2021

2020

2021

2020

Net sales

$

9,419

$

8,571

$

18,383

$

15,923

Cost of sales

5,657

5,270

10,949

9,647

Gross profit

3,762

3,301

7,434

6,276

Operating expenses:

General and administrative

1,422

1,472

2,768

2,800

Sales and marketing

1,131

1,374

2,681

2,618

Research and development

127

173

284

308

Total operating expenses

2,680

3,019

5,733

5,726

Income from operations

1,082

282

1,701

550

Interest expense, net

(101

)

(121

)

(196

)

(251

)

Income before income taxes

981

161

1,505

299

Income tax expense

11

6

14

6

Net income

$

970

$

155

$

1,491

$

293

Net income per share:

Basic

$

0.16

$

0.03

$

0.24

$

0.05

Diluted

$

0.15

$

0.03

$

0.24

$

0.05

Shares used in calculation of net income per share:

Basic

6,130

6,054

6,124

6,042

Diluted

6,315

6,163

6,312

6,147

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