Cyanotech has increasing been moving toward making finished products sold under its Nutrex Hawaii sales arm. Finished product sales in fiscal 2013 were up 54% in US mainland markets and 81% in online sales.
“In the 4th quarter, our packaged consumer products represented more than half of company revenue for the first time, accounting for 52% (+14 pts.) of total net sales,” said Brent Bailey, Cyanotech president and CEO.
“Retail dollar growth in the natural products channel of our Astaxanthin products was +59% and our market share was 50% (+22 pts.). Our Spirulina retail dollar growth for the quarter was +55% and our market share was 50% (+8 pts.).
“The solid revenue growth combined with a stronger gross margin from improved Spirulina production and continued growth in Astaxanthin production, nearly doubled operating profit to $597,000 (+92%) in the 4th quarter,” he said.
Earnings details
For the fourth quarter, Cyanotech’s net sales were $6.9 million compared to $6 million in Q4 2012, an increase of 15%. For the fiscal year the figures were $27.6 million, compared to $24.6 million, an increase of 12%. Gross profit in the fourth quarter was $2.7 million with a gross profit margin of 39%, compared to gross profit of $2 million and gross profit margin of 34%. For the year those figures were $11 million with a margin 40% and $9.8 million and 40%.
Cyanotech seems to have solved production issues that negatively impacted sprirulina production in the first three quarters. A strain of undersized sprirulina cells had taken hold, making it difficult to filter them out in the harvesting process and surviving to give rise to yet more undersized cells. Another drag on earnings is continued legal fees that the company has incurred in dispute with Valensa/Parry, a rival astaxanthin producer that at one time had a contractual relationship with Cyanotech. In addition, Bailey said, the company continues to invest in new personnel, new facilities and additional marketing to drive topline growth.