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Cyanotech Reports Financial Results for Fiscal Year 2010
— Sales Increase 13% to $15.7MM, EPS Reaches $0.26 —

KAILUA KONA, Hawaii (June 24, 2010) — Cyanotech Corporation (Nasdaq Capital Market: CYAN), a world leader in microalgae-based, high-value nutrition and health products, today announced financial results for fiscal year 2010, ended March 31, 2010.

Fiscal Year 2010
Revenues for fiscal 2010 increased 13% to $15,742,000, compared to revenues of $13,950,000 for fiscal 2009. Gross profit was $6,633,000, with gross profit margin of 42%, compared to gross profit of $5,512,000 and gross profit margin of 40% for fiscal 2009. Net income increased 22% to $1,391,000, or $0.26 per diluted share, compared to $1,142,000, or $0.22 per diluted share for fiscal 2009.

“Cyanotech continued solid performance increases in fiscal 2010, with steady production supporting increased demand for our products across the board,” said David I. Rosenthal, Interim President and CEO. “Sales of bulk, private label and our own branded packaged products for both Spirulina and natural Astaxanthin all increased. This balance speaks well for our continuing prospects going forward.”

Rosenthal noted, “Cyanotech continued to increase emphasis on higher-margin branded packaged products containing Spirulina and natural Astaxanthin in formularies for specific nutritional health benefits, as well as on expanded channels of domestic distribution. We also continued to focus on sound business fundamentals with effective cost containment and technology improvements, while restarting our clinical trial program to support future product offerings.”

Cash and cash equivalents were $817,000 at March 31, 2010 compared to the March 31, 2009 balance of $977,000. Working capital increased to $4,942,000 at March 31, 2010 compared to $3,892,000 at March 31, 2009. Inventories increased as production remained strong and Cyanotech continued to meet customers’ volume and timing demands for product. Long-term debt was significantly reduced during the year as the Company edged toward payoff of a term loan on May 1, 2010.

Revenues were divided evenly between Spirulina and natural Astaxanthin product sales. International sales were 43% of total sales for fiscal year 2010 compared to 47% for fiscal year 2009 reflecting the heightened focus on domestic marketing channels and Cyanotech’s own branded products.

Rosenthal added that Cyanotech’s growth potential is not constrained by its current production capacity, and that moving product mix to a larger percentage of branded packaged products should provide ample opportunity for sales and income growth.

Fourth Quarter Fiscal 2010
Revenues for the fourth quarter of fiscal 2010 increased 11% to $3,814,000, compared to revenues of $3,422,000 for the fourth quarter of fiscal 2009. Gross profit was $1,387,000, with gross profit margin of 36%, compared to gross profit of $1,264,000 and gross profit margin of 37% reported for the fourth quarter of fiscal 2009. Net loss was $226,000, or ($0.04) per diluted share, compared to net income of $194,000, or $0.04 per diluted share for the fourth quarter of fiscal 2009.

The fourth quarter results for fiscal 2010 include costs associated with separation of the Company’s CEO and disposal of depreciable assets no longer employed in the business, which decreased net income by $154,000 and $155,000 respectively, for a total EPS impact of $0.06 per diluted share for both the fourth quarter and year-end results.

Chief Executive Officer Update
In late February 2010, Cyanotech’s President and Chief Executive Officer was removed from his responsibilities by the Board of Directors and Mr. Rosenthal, a Director, was named Interim President and CEO. A search for a new executive officer was initiated in March 2010 and continues in process.

About CyanotechCyanotech 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 54 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 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 which 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 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-K for the period ended March, 31, 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.)

Contact:
Bruce Russell: [email protected]
(310) 559-4955 x101


 

 
 
 
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