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Dutton Associates Announces Investment Opinion: Cyanotech Neutral Rating Based on Valuation Maintained by Dutton Associates

EL DORADO HILLS, Calif., Aug 31, 2005 (BUSINESS WIRE) -- Dutton Associates continues coverage of Cyanotech Corporation (Nasdaq:CYAN), maintaining its rating at Neutral and a price target of $1.25. The 8-page report by Dutton senior analyst Jonathan Ziegler, CFA, is available at www.jmdutton.com as well as from First Call, Bloomberg, Zacks, Reuters, Knobias, Investars, and other leading financial portals.

Cyanotech reported an 11.9% increase in sales to $3.0 million in its first fiscal 2006 quarter ended June 30 and, even more important, a return to profitable operation -- a positive swing from the marginal loss reported in the fourth quarter. The sales growth was remarkable in the Company's Spirulina Pacifica(R) product line which achieved a year-over-year gain of 37.0% to $1.9 million. This product line now accounts for 62.4% of total sales. An important driver of the swing back into the black from the fourth quarter was the 16% growth in sales of the natural astaxanthin product lines to $1.05 million; however, such sales were down by 19% from the year-ago quarter. The Company reported EPS of $0.01 unchanged from the same quarter a year ago. To place the report in perspective, we had been estimating EPS of $0.01. Going forward, the recovery in the aquaculture fish farming population (or inventory) in Japan could be expected to drive a gradual improvement in sales of the NatuRose offering. We continue our fiscal 2006 and 2007 estimates of $0.05 per share and $0.06 per share, respectively. While we see some exciting prospects for the Company with the expected recovery in the aquaculture industry in Japan and the potential for new applications for the BioAstin(R) nutritional supplement product offering, we believe the shares are currently trading at a fair multiple. Thus, we continue our rating of Neutral.

About Dutton Associates
Dutton Associates is one of the largest independent investment research firms in the U.S. Its 27 senior analysts are primarily CFAs and have expertise in many industries. Dutton Associates provides continuing analyst coverage of over 110 enrolled companies, and its research, estimates, and ratings are carried in all the major databases serving institutions and online investors.

The cost of enrollment in our one-year continuing research program is US $35,000 prepaid for 4 Research Reports, typically published quarterly, and requisite Research Notes. Dutton Associates received $33,000 from the Company for 4 Research Reports with coverage commencing on 12/22/2004. The Firm does not accept any equity compensation. Our principals and analysts are prohibited from owning or trading in securities of covered companies. The views expressed in this research report accurately reflect the analyst's personal views about the subject securities or issuer. Neither the analyst's compensation nor the compensation received by us is in any way related to the specific ratings or views contained in this research report or note. Please read full disclosures and analyst background at www.jmdutton.com before investing.

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


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