Martek Biosciences Corp. (MATK) filed Quarterly Report for the period ended 2009-07-31.
Martek Biosciences Corp. develops manufactures and sells products from microalgae. The company's products include: (1) specialty nutritional oils for infant formula nutritional supplements and food ingredients; (2) high value reagents and technologies to visualize molecular interactions for drug discovery and development; and (3) new powerful fluorescent markers for diagnostics rapid miniaturized screening and gene and protein detection. (Company Press Release) Martek Biosciences Corp. has a market cap of $800.9 million; its shares were traded at around $24.1 with a P/E ratio of 20.7 and P/S ratio of 2.3. Martek Biosciences Corp. had an annual average earning growth of 24.2% over the past 5 years.
Highlight of Business Operations:
For the three and nine months ended July 31, 2009, we generated net income of $8.9 million and $29.6 million, respectively, on revenues of $77.8 million and $257.6 million, respectively.
Martek expects total revenues for the fourth quarter of fiscal 2009 to be between $87 million and $92 million with fourth quarter infant formula revenue projected to be between $69 million and $75 million and fourth quarter non-infant formula nutritional revenue projected to be between $9.5 million and $11.5 million. Contract manufacturing and services revenue is projected to be between $6.0 million and $6.5 million in the fourth quarter. The expected revenue increase from prior periods in the contract area is attributable to the additional production by Martek of the starting material used to produce an anti-viral drug for the treatment of influenza and the BP arrangement noted above. Fourth quarter gross margin is expected to be between 43% and 44%. Net income for the fourth quarter is projected to be between $10.4 million and $11.8 million, and diluted earnings per share are projected to be between $0.31 and $0.35.
For the full fiscal year 2009, Martek expects total revenues to be between $345 million and $350 million. Net income for the full fiscal year 2009 is projected to be between $40.0 million and $41.4 million, and diluted earnings per share are projected to be between $1.20 and $1.24, a pre-tax earnings increase of between 10% and 15% over fiscal 2008.
Product sales decreased $8.4 million or (10.1%) in the three months ended July 31, 2009 as compared to the three months ended July 31, 2008 and decreased $2.7 million or (1.1%) in the nine months ended July 31, 2009 as compared to the nine months ended July 31, 2008. Product sales were comprised of the following (in thousands):
Contract manufacturing sales revenues, totaling approximately $2.8 million and $10.4 million in the three and nine months ended July 31, 2009, respectively, and $4.9 million and $12.0 million in the three and nine months ended July 31, 2008, respectively, relate mainly to fermentation work performed for various third parties at our Kingstree, South Carolina facility. The decrease in contract manufacturing revenues in the three and nine months ended July 31, 2009 as compared to the three and nine months ended July 31, 2008 was primarily due to a change in the timing of orders from one existing customer. While we plan to continue reducing the scope of our contract manufacturing activities, we will provide contract services to both existing and new customers if reasonable profit margins can be generated, there is no impact to our higher margin nutritional oils business or we believe that such services could have a strategic fit in the future.
Cost of contract manufacturing sales, totaling $2.7 million and $10.1 million in the three and nine months ended July 31, 2009, respectively, and $4.4 million and $10.8 million in the three and nine months ended July 31, 2008, respectively, are the costs related to the fermentation work performed for various third parties at our Kingstree, South Carolina facility. Our contract manufacturing margins vary between periods primarily due to contract mix and volume.
MATK is in the portfolios of John Hussman of Hussman Economtrics Advisors, Inc..
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