The Hawaii-based firm recorded a net income of $514,000 in the third quarter this year, compared to a net loss of $594,000 in 2008.
According to the company, the profit swing is a result of “exceptional execution” of its focus on quality, cost containment, increased productivity and sales growth.
“The combination of management focus and operational execution delivered a 343.6 percent improvement in gross profit margin and $514,000 of net income for the third quarter. These efforts and results bring our year-to-date net income to $948,000, a $2.268-million positive swing in profit over the prior-year nine-month period,” said Andrew Jacobson, the company’s president and CEO.
Revenues for the third quarter of fiscal 2009, ended December 31 2008, came in at $3.6m, almost 30 percent higher than the $2.8m recorded last year.
Gross profit for the third quarter was $1.6m, with gross profit margin of 44 percent, compared to a gross profit of $353,000 and gross profit margin of 13 percent reported for the same quarter of the prior year.
New cultivation method
“As exciting as the third quarter and year-to-date results are, the results of our new spirulina cultivation strategy implemented earlier in the fiscal year are even more promising,” said Jacobson.
Cyanotech’s new cultivation method, announced earlier this month, improves the nutritional profile of the ingredient by increasing levels of core components, such as zeaxanthin (200 percent increase over the firm’s previous product), carotenoids (15 percent increase), iron (200 percent) and vitamin B-12 (62 percent).
According to Cyanotech’s vice president of sales and marketing Bob Capelli, this will allow its customers in the food and supplements industries to improve the nutrient profile of their products without increasing the levels of spirulina used.
Spirulina, a blue-green vegetable algae, is a rich source of protein, amino acids, phytonutrients, iron, antioxidants and B-vitamins. Cyanotech’s spirulina is grown in Hawaii, and has GRAS (generally recognized as safe) status, meaning it can be used as a functional ingredient in foods and beverages.
The company told NutraIngredients-USA.com earlier this month that it will continue to supply the ingredient at the same price.
The firm said it was able to enhance its spirulina’s nutritional levels by improving the nutrient profile of grow ponds and modifying the environment of the grow ponds.
Seasonal production changes
Moving forward, Cyanotech said environmental conditions may result in a slight dip in productivity.
“We are still in a period of lower temperatures and reduced sunlight, so we could experience seasonally reduced productivity in the fourth quarter. However, we remain focused on continued execution of our plan,” said Jacobson.