June 23, 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 fourth quarter and full 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 10K for fiscal year 2021 filed with the Securities and Exchange Commission.
I will turn it back to Gerry for comments on the quarter.
For fiscal year 2021 we deleveraged the balance sheet by $1.7 million, generated cash flow from operations of $2.4 million and invested in capital for the business. Our cash balance improved by $1.4 million from $2.4 million in fiscal year 2020 to $3.8 million in fiscal year 2021.
During the fourth quarter, we launched new labels for both our BioAstin® Hawaiian Astaxanthin® and Hawaiian Spirulina products. The new labels were well received in the marketplace.
The company’s fourth quarter net sales of $9.4 million increased $804,000 or 9% over fiscal year 2020. The product mix changed with higher bulk and contract services sales of $1.4 million offset by lower sales of Nutrex products of $549,000. Our gross margin for the fourth quarter was lower than the same quarter, prior year, due to product mix. Bulk sales have a lower gross margin. In addition, the current quarter, was also impacted by higher current year spirulina costs per kilo driven by lower production.
Turning over to Felicia to discuss the financial results.
Thanks Gerry, Key financial results for the fourth quarter and full year:
- In the fourth quarter this fiscal year, net sales were $9.4 million as compared to $8.6 million last year, an increase of $804,000 or 9%. Total sales for the fiscal year were $32.3 million as compared to $31.9 million last year, growth of $446,000 or 1%. During the fiscal year there was a shift in product mix. Sales of Nutrex declined by $3.7 million or 14% offset by an increase in sales of bulk product and contract services by $4.1 million or 67%.
- Gross profit for the fourth quarter of fiscal 2021 was $2.8 million with gross profit margin of 29.4%, compared to gross profit of $3.1 million and gross profit margin of 35.7% in the fourth quarter of fiscal 2020. The 6.3 percentage point decline was previously discussed. Total gross profit for the fiscal year was $11.1 million with gross profit margin of 34.4%, as compared to $12.7 million, with gross profit margin of 39.8%, last year. The 5.4 percentage point decline is due the product mix, with bulk sales at lower gross profit margin and current year higher spirulina costs per kilo driven by lower production volumes in the fiscal year.
- Fourth quarter operating loss was $24,000 compared to operating income of $227,000 in the fourth quarter fiscal year 2020. For the full year, operating income was $84,000 compared to operating income of $1,053,000 last year.
- Net loss for the fourth quarter was $200,000, or $0.03 per diluted share, compared to net income of $121,000, or $0.01 per diluted share. Net Income for the full year was $920,000 or $0.15 per diluted share, compared to net income of $387,000, or $0.06 per diluted share last year, with the increase 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 ended the current fiscal year with cash of $3.8 million and working capital of $9.3 million as compared to $2.4 million and $8.3 million, respectively as of March 31, 2020.
I will hand the call back to Gerry for concluding comments.
We had one question which we will now address.
Are there any efforts underway at Cyanotech to explore the use of Spirulina microalgae for biofuel applications?
No, we have never considered Spirulina for use in biofuel applications. The production cost of Spirulina is at least two orders of magnitude too high to be practical for biofuel application.
Thank you all for attending the call. Please stay safe and healthy.