Cyanotech Corporation (NASDAQ:CYAN)
Q2 Fiscal Year 2021 Earnings Broadcast
November 13, 2020; 8:00PM EDT
Gerry Cysewski – Chief Executive Officer
Felicia Ladin – Chief Financial Officer
Aloha from Kona, Hawaii. Thank you all for joining us today. I am Gerry Cysewski, Chief Executive Officer of Cyanotech. Joining me on the call today is Felicia Ladin, our Chief Financial Officer. I am pleased to report Cyanotech’s second quarter fiscal year 2021 earnings results.
Let me start by saying our discussion today may include forward-looking statements. We do not undertake any obligation to update forward-looking statements either as a result of new information, future events or otherwise. Our actual results may differ materially from what is described in these forward-looking statements. Some of the factors that may cause results to differ are listed in our publicly filed documents. For additional information, we encourage you to review our 10Q and fiscal year 2020 10K filings with the Securities and Exchange Commission.
Before we discuss the quarter, I would like to welcome our new CFO, Vice President of Finance and Administration, and Treasurer, Felicia Ladin to Cyanotech. Felicia started part-time on September 28th and has transitioned into the role full-time effectively October 26th. She has a proven track record in managing all aspects of finance with a focus on financial planning and analysis. Her previous experience is in the pharmaceutical and life science industry. She most recently served as CFO and Treasurer for Albany Molecular Research, Inc.
Turning to the quarter: The company continues to focus on operational efficiencies across all facets of the organization. The company has positive operating income in the last five quarters and has generated cash flow from operations through the first six months of the current fiscal year of approximately $1.1M. Additionally, working capital metrics are stable and reflect the planned growth in astaxanthin inventory. From a customer perspective, in the packaged products portfolio, we are seeing an increase in sales to customers with an on-line presence as the COVID-19 restrictions continue to impact brick and mortar stores.
In October, we launched a line extension of BioAstin® Hawaiian Astaxanthin® in a new dietary form, water dispersible powder, available in both 1% and 2% concentrations to the bulk ingredients market worldwide. The product has an extremely clean label – two ingredients; citrus fiber and haematococcus pluvialis microalgae extract.
Now I would like to turn over the call to Felicia to discuss the second quarter. Felicia, please?
Thank you, Gerry and good evening, everyone.
Turning to our second quarter results, total net sales for the second quarter of fiscal 2021 were $8,571,000 compared to $7,690,000 for the second quarter of fiscal 2020. Total sales revenue increased $881,000 or 12% from the prior year. The increase in sales was primarily driven by customer demand for both bulk astaxanthin and spirulina, as well as packaged spirulina, offset by lower sales of packaged astaxanthin.
Gross profit for the second quarter of fiscal 2021 was $3,301,000, with gross profit margin of 38.5%, compared to gross profit of $3,063,000 and gross profit margin of 39.8% in the second quarter of fiscal 2020.
Operating income for the second quarter was $282,000 compared to $409,000 last year reflecting a decrease of $127,000.
Company had cash of $4.3M million and working capital of $8.8 million as compared to $2.4 million and $8.4 million, respectively as of March 31, 2020.
Now back to Gerry.
We had a few questions from shareholders and investors which we will now address.
The first question: Is the algae farmed or open ocean acquired?
Our algae are farmed on the Big Island of Hawaii. You can see an aerial view of our farm on www.cyanotech.com.
The second question: Can you give more information regarding Astaxanthin seasonal production costs?
We cannot. This is proprietary information.
The third question: Can you please give more information regarding BioAstin water dispersible powder thus far?
Just over a month ago, we launched a line extension of BioAstin® Hawaiian Astaxanthin® in a new dietary form, water dispersible powder, available in both 1% and 2% concentrations to the bulk ingredients market worldwide.
Thank you very much for joining our call today. Please stay safe and healthy.