Cyanotech Reports Financial Results for the 4th Quarter and Fiscal 2000; 4th Quarter Sales Increase 28%, Net Loss Narrowed.Business Editors KAILUA-KONA, Hawaii--(BUSINESS WIRE)--May 11, 2000 Cyanotech Corporation (Nasdaq NMS See NetWare Management System. : CYAN), the world leader in producing high-value, natural products from microalgae, today announced financial results for the fourth quarter and fiscal 2000, ended March 31, 2000. For the fourth quarter, the Company reported net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $2,266,000. This represents a 28% increase over net sales of $1,775,000 for the fourth quarter of fiscal 1999, and a sequential 11% increase over the prior quarter. Net loss for the fourth quarter decreased to $161,000, or ($0.02) per share (basic and diluted), compared to a net loss of $765,000, or ($0.06) per share (basic and diluted), for the same quarter in fiscal 1999. For fiscal 2000, the Company reported net sales of $7,398,000, compared to net sales of $6,738,000 for fiscal 1999. Net loss for the year was $4,485,000, or ($0.34) per share (basic and diluted), compared to a net loss of $2,557,000, or ($0.21) per share (basic and diluted) in fiscal 1999. Included in the fiscal 2000 results, however, is an asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge of $2,796,000, relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc a terminated joint venture. Excluding the asset impairment charge, the loss for fiscal 2000 was $1,689,000, or ($0.14) per share (basic and diluted). "The Company's improved performance for the fourth quarter and fiscal year reflects continuing growth in demand for our products," said Gerald R. Cysewski, Ph.D., chairman, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "We achieved higher sales of our Spirulina spirulina Any cyanobacteria in the genus Spirulina. A traditional food source in parts of Africa and Mexico, spirulina is an exceptionally rich source of vitamins, minerals, and protein, and one of the few nonanimal sources of vitamin B12. and astaxanthin products, lower astaxanthin production costs and reduced operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . Sales momentum continues to build for our new BioAstin(TM) product, and we are currently operating at full capacity with growing efficiency. As a result, we anticipate significant further improvement in operating results during fiscal 2001." Cash provided by operating activities during the fiscal year totaled $343,000, compared to cash used in operating activities of $874,000 during the prior fiscal year. Gross margins increased to 20% during the fiscal year from 14% reported in fiscal 1999. During the fourth quarter, gross margins were 26%, compared to 15% in the same quarter of the prior fiscal year. Working capital at the end of fiscal 2000 was $2.3 million, compared to $917,000 at the end of the prior year. In April 2000, after the end of the fiscal year, the Company announced it had refinanced its existing credit facility totaling $1.6 million with a new 10-year term loan for $3.5 million at a more favorable interest rate. In May 2000, the Company completed a private placement of 6% convertible subordinated debentures subordinated debenture An unsecured bond with a claim to assets that is subordinate to all existing and future debt. Thus, in the event that the issuer encounters financial difficulties and must be liquidated, all other claims must be satisfied before due 2002, providing net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of approximately $1.1 million. On a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, assuming the inclusion of these two transactions in the March 31, 2000 balances, working capital would be $4.2 million. "Our international business continues to be strong, with export shipments during the fourth quarter accounting for 50% of net sales. Sales to our largest customer, Spirulina International, were 32% of net sales during the quarter. Spirulina International, a Europe-based Spirulina marketing and distribution company, is forecasting continued growth in its demand for our product during fiscal 2001," said Dr. Cysewski. "In April 2000, we also signed a Letter of Intent with a Calcutta, India-based company to distribute our Spirulina and BioAstin products throughout India, beginning later this year. This represents a significant opportunity for Cyanotech, as India has the world's second largest population and a growing consumer base of over 300 million people." "We have experienced strong domestic sales of our new BioAstin consumer product since it was made available on a direct basis over the Internet through www.cyanotech.com and by mail order in January 2000," noted Dr. Cysewski. "The Company is currently in varied stages of negotiation with several U.S. nutritional companies, introduced in part through our initial arrangement with Banner Pharmacaps, for the distribution of products containing BioAstin through their current retail and wholesale channels. We have agreed with Banner to pursue these sales opportunities directly. I believe this approach will provide the Company with higher sales revenue and higher gross profit." Cyanotech has filed three U.S. patent applications for BioAstin based on the protective properties of astaxanthin to retard and ameliorate a·mel·io·rate tr. & intr.v. a·me·lio·rat·ed, a·me·lio·rat·ing, a·me·lio·rates To make or become better; improve. See Synonyms at improve. [Alteration of meliorate. fever blisters fever blister: see herpes simplex. (cold sores cold sore: see herpes simplex. ) and canker sores Canker Sores Definition Canker sores are small sores or ulcers that appear inside the mouth. They are painful, self-healing, and can recur. Description , for relieving Carpal Tunnel Syndrome carpal tunnel syndrome: see repetitive stress injury. carpal tunnel syndrome (CTS) Painful condition caused by repetitive stress to the wrist over time. (CTS (1) (Clear To Send) The RS-232 signal sent from the receiving station to the transmitting station that indicates it is ready to accept data. Contrast with RTS. (2) (Common Type System) The data typing used in . ), and to retard and prevent sunburn sunburn, inflammation of the skin caused by actinic rays from the sun or artificial sources. Moderate exposure to ultraviolet radiation is followed by a red blush, but severe exposure may result in blisters, pain, and constitutional symptoms. by UV light. The Company has also initiated a double-blind, randomized clinical trial randomized clinical trial, n a clinical study where volunteer participants with comparable characteristics are randomly assigned to different test groups to compare the efficacy of therapies. of BioAstin's effects in relieving CTS at a major research institution specializing in the treatment of CTS. PROFILE -- Cyanotech Corporation produces high-value natural products from microalgae, and is the world's largest commercial producer of natural astaxanthin from microalgae. Products include BioAstin(TM), a natural astaxanthin product for use as a human nutritional supplement; NatuRose(TM) natural astaxanthin used worldwide in the aquaculture aquaculture, the raising and harvesting of fresh- and saltwater plants and animals. The most economically important form of aquaculture is fish farming, an industry that accounts for an ever increasing share of world fisheries production. and animal feed industry; Spirulina Pacifica(TM), a nutrient-rich dietary supplement Noun 1. dietary supplement - something added to complete a diet or to make up for a dietary deficiency diet - a prescribed selection of foods vitamin pill - a pill containing one or more vitamins; taken as a dietary supplement ; and phycobiliproteins, which are fluorescent pigments used in the immunological immunologic, immunological emanating from or pertaining to immunology. immunologic competence see immunocompetence. immunologic domains diagnostics market. Corporate and product information is available at http://www.cyanotech.com SAFE HARBOR Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. -- Except for statements of historical fact, the statements in this press release are forward-looking. Such statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These factors include, but are not limited to, general economic conditions, changes in sales levels to our largest customers, weather patterns, risks associated with the acceptance of new products, competition, government regulation, and other factors more fully detailed in the company's recent quarterly 10-Q and annual 10-K filings with the Securities and Exchange Commission. WEBCAST -- Cyanotech will hold a conference call on May 11, 2000 at 2:00 p.m. Eastern time to be broadcast live over the Internet. It can be accessed by all interested parties by linking from www.cyanotech.com or through the Investor Broadcast Network's Vcall Web site at www.vcall.com . To listen to the live call, please go to the Web site at least fifteen minutes prior to the start of the call to register, download, and install any necessary audio software. For those who are not available to listen to the live broadcast, a replay will be available shortly after the call on the Vcall site. (Financial Highlights follow)
Financial Highlights
(in thousands, except per share data)
Fourth Quarter Fiscal 2000 Three Months Ended Mar. 31,
2000 1999
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Income Statement Data
Net sales $ 2,266 $ 1,775
Gross profit $ 598 $ 271
Loss from operations $ (199) $ (859)
Loss before taxes $ (178) $ (940)
Income tax benefit $ 17 $ 175
Net loss $ (161) $ (765)
Loss available to
common stockholders $ (219) $ (824)
Net loss per common share,
basic and diluted $ (0.02) $ (0.06)
Shares used in computing
net loss per common share 13,968 13,604
Fiscal Year 2000 Twelve Months Ended Mar. 31,
2000 1999
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Income Statement Data
Net sales $ 7,398 $ 6,738
Gross profit $ 1,503 $ 973
Asset impairment charge $ (2,796) --
Loss from operations $ (4,312) $ (2,642)
Loss before taxes $ (4,505) $ (2,846)
Income tax benefit $ 20 $ 289
Net loss $ (4,485) $ (2,557)
Loss available to
common stockholders $ (4,722) $ (2,795)
Net loss per common share,
basic and diluted $ (0.34) $ (0.21)
Loss excluding asset
impairment charge $ (1,689) --
Loss available to
common stockholders, excluding
asset impairment charge $ (1,926) --
Loss per common share, excluding
asset impairment charge $ (0.14) --
Shares used in computing
net loss per common share 13,775 13,602
At Mar. 31, 2000 Mar. 31, 1999
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Balance Sheet Data
Working capital $ 2,280 $ 917
Total assets $19,689 $23,621
Total debt and capital
lease obligations $ 1,493 $ 1,774
Stockholders' equity $16,645 $20,707
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