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Cyanotech Corp. Reports Operating Results (10-Q)

February 08, 2013 | About:
10qk

10qk

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Cyanotech Corp. (CYAN) filed Quarterly Report for the period ended 2012-12-31.

Cyanotech Corporation has a market cap of $26.8798 million; its shares were traded at around $4.92 with a P/E ratio of 10.2249 and P/S ratio of 1.0488.

Highlight of Business Operations:

The Company recognizes abnormal production costs, including fixed cost variances from normal production capacity, as an expense in the period incurred. Approximately $161,000 and $875,000 of abnormal production costs were charged to cost of sales for the three and nine months ended December 31, 2012, respectively. Approximately $236,000 and $652,000 of abnormal production costs were charged to cost of sales for the three and nine months ended December 31, 2011.

Net Sales The net sales growth of 8% for the quarter was driven by a 42% increase in our packaged products consistent with our focus and investment in the consumer packaged goods side of our business. Within this growth, sales of spirulina increased 42% and sales of astaxanthin increased 42%. Sales of our bulk products decreased only 9% as a result of the lower production of spirulina. Within this decrease, sales of bulk spirulina decreased 39% as a result of low production during the quarter and sales of bulk astaxanthin increased 3%. International sales represented 38% of net sales for the three months ended December 31, 2012 compared to 29% for the same period a year ago. There were no customers with sales equaling or exceeding 10% of our total sales for the three months ended December 31, 2012 and 2011.

Gross Profit Our gross profit percent of net sales decreased by 2.6 points in the third quarter. Gross profit was impacted by lower spirulina production which resulted in the recognition of abnormal production costs of approximately $161,000 and $236,000, in the third quarter of fiscal years 2013 and 2012, respectively. The abnormal costs were driven by a 17.5% decrease in spirulina production from the similar period in the prior year and a 6.2% increase in costs as compared with the similar period in the prior year.

Net Sales The net sales growth of 10.9% for the first nine months of fiscal 2013 was driven by a 40% increase in our packaged products consistent with our focus and investment in the consumer packaged goods side of our business. Within this growth, sales of spirulina increased 34% and sales of astaxanthin increased 45%. Sales of our bulk products decreased 4%, driven by lower production of spirulina in the third quarter. Within this decrease, sales of bulk spirulina decreased 33% and sales of bulk astaxanthin increased 10%. International sales represented 36% of net sales for the nine months ended December 31, 2012 compared to 32% for the same period a year ago. There were no customers with sales equaling or exceeding 10% of our total sales for the nine months ended December 31, 2012 and 2011.

Gross Profit Our gross profit percent of net sales decreased by 1.5 points in the first nine months of fiscal 2013. Gross profit was impacted by the reduction in spirulina production which resulted in the recognition of abnormal production costs of approximately $875,000 and $652,000, for the nine months ended December 31, 2012 and 2011, respectively. The abnormal costs were driven by a 25.9% decrease in spirulina production from the similar period in the prior year and a 2.2% increase in costs as compared with the similar period in the prior year.

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