Cyanotech Corporation (NASDAQ:CYAN)
August 11, 2022; 8:00PM EDT
Matt Custer – President and Chief Executive Officer
Felicia Ladin – Chief Financial Officer
Aloha from Kona, Hawaii. Thank you all for joining us today to report Cyanotech’s first quarter fiscal year 2023 earnings results. I am Matt Custer, President and 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 Matt. 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 2022 10K report filed with the Securities and Exchange Commission.
I will turn it back to Matt for comments on the quarter, Matt:
The disappointing results in the first quarter were driven primarily by the $2.2 million decrease in sales and a higher cost per kilo of astaxanthin. Lower sales in the quarter for Nutrex of $1.7 million related to timing of shipments to a Nutrex customer as we transitioned to their selling platform in the prior year offset by sales to key existing customers. There was also a decrease in bulk spirulina sales of $490,000 due to lower demand by our top customer coupled with timing of orders from other customers.
The increase in cost for astaxanthin was driven primarily by lower production in the first quarter due to staff shortages. Production levels normalized late in the first quarter.
Turning over to Felicia to discuss the financial results, Felicia,
Thank you, Matt and good evening, everyone.
Key financial results for the first quarter:
- Total net sales for the first quarter of fiscal 2023 were $6.7 million compared to $9.0 million for the first quarter of fiscal 2022. Total sales revenue decreased by $2.2 million or 25% from the prior year due to the reasons outlined by Matt.
- Gross profit for the first quarter of fiscal 2023 was $2.3 million, with a gross profit margin of 34.5%, compared to gross profit of $3.7 and a gross profit margin of 41.0% in the first quarter of fiscal 2022. A 6.5 percentage point decrease due to customer mix and higher cost of astaxanthin previously discussed.
- Operating loss for the first quarter was $425,000 compared to operating income of $619,000 in the first quarter of fiscal 2022, a decrease of $1,044,000.
- Net loss for the current quarter was $472,000, or $0.08 per diluted share, compared to net income of $520,000, or $0.09 per diluted share in the prior year.
- The company had cash of $737,000 and working capital of $11.0 million compared to $2.6 million and $11.4 million, respectively as of March 31, 2022.
I will hand the call back to Matt for concluding comments, Matt:
We have had one question:
Since the company launched a new product during the quarter, TurmericAstin™, on June 17th, I’m wondering if Nutrex plans on selling it generally at places such as Amazon, or only on the company’s website?
There will be broad distribution of TumericAstin™, giving consumers many purchasing options. It will be available on Amazon as well as other e-tailers and at brick and mortar stores.
Thank you for attending the call.
Please stay safe and healthy. Aloha