February 12, 2021; 8:00PM EDT
Gerry Cysewski – Chief Executive Officer
Felicia Ladin – Chief Financial Officer
Aloha from Kona, Hawaii. Thank you all for joining us today to report Cyanotech’s third quarter fiscal year 2021 earnings results. I am Gerry Cysewski, Chief Executive Officer of Cyanotech. Joining me on the call today is Felicia Ladin, our Chief Financial Officer. I will turn the call over to Felicia to provide our forward looking statement.
Thanks Gerry. 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 report filed with the Securities and Exchange Commission.
I will turn it back to Gerry for comments on the quarter, Gerry:
The company’s third quarter results were negatively impacted by two factors: the timing of product received by customers from our carriers and higher cost of sales. Overall, we are continuing to see positive trends in sales in our e-commerce business as consumers shift their shopping preference to on-line during the global pandemic.
Our gross margin this quarter was lower than the same quarter, prior year and our trend in the current fiscal year as a result of sales of higher cost inventory for astaxanthin produced in FY2020 during the winter months where yields are typically lower as a result of fewer hours and lower intensity sunlight. In addition, the current quarter was also impacted by higher current year spirulina costs per kilo driven by lower production.
During the quarter we received full forgiveness from the Small Business Administration on the $1,389,000 Paycheck Protection program loan including accrued interest of $8,000. We paid $250,000 on the line of credit.
Turning over to Felicia to discuss the financial results, Felicia,
Thanks Gerry, Key financial results for the third quarter:
- Total net sales for the third quarter of fiscal 2021 were $6,895,000 compared to $7,504,000 for the third quarter of fiscal 2020. Total sales revenue decreased by $519,000 or 7% from the prior year. The biggest driver of the overall sales decrease was the timing of customer shipments. Nutrex sales declined by $1,344,000 or 21% offset by higher sales of bulk product of $714,000 or 72%.
- Gross profit for the third quarter of fiscal 2021 was $2,071,000, with gross profit margin of 29.6%, compared to gross profit of $2,877,000 and gross profit margin of 38.3% in the third quarter of fiscal 2020. The 8.7 percentage point decline was previously discussed.
- Operating loss for the third quarter was $441,000 compared to operating income of $367,000 in the third quarter of fiscal 2020.
- Net income was $827,000, or $0.13 per diluted share, compared to a net income of $171,000, or $0.03 per diluted share with the increase primarily due to the forgiveness of the loan under the Paycheck Protection Program in the amount of $1,389,000 including accrued interest of $8,000.
- The company had cash of $3.3M million and working capital of $8.4 million as compared to $2.4 million and $8.4 million, respectively as of March 31, 2020.
I will hand the call back to Gerry for concluding comments, Gerry:
We have not had any questions. Thank you for attending the call.
Please stay safe and healthy. Aloha