Cyanotech Corporation (CYAN) Earnings Call Transcript & Summary

Aloha from Kona, Hawaii. Thank you all for joining us today. I am Matt Custer, President and Chief Executive Officer of Cyanotech. Joining me on the call today is Felicia Ladin, our Chief Financial Officer, to report Cyanotech's fourth quarter and fiscal year 2024 earning results. I will turn the call over to Felicia to provide our forward-looking statement.

Thanks, Matt. Our discussion today may include forward-looking statements. We do not undertake any obligation to update forward-looking statements either as a result of new information, future events or otherwise. Our actual results may differ materially from what is described in these forward-looking statements. Some of the factors that may cause results to differ are listed in our publicly filed documents. For additional information, we encourage you to review our 10-K fiscal year 2024 report filed with the Securities and Exchange Commission. I will turn it back to Matt. Matt?

Thank you, Felicia. Although the year was filled with challenges, our team effectively managed spending, production and inventory to conclude the year with only slightly increased debt of $209,000. Our sales were essentially flat with prior year. However, the product mix shifted as we saw an increase in our packaged sales. This increase was offset by declines in spirulina bulk sales as the market for bulk material is increasingly price sensitive with many companies sourcing lower-priced ingredient -- international ingredients. Our realigned commercial function continues to expand on and create market awareness with strategic initiatives. These initiatives include restructuring the sales team to bolster both the business-to-business and business-to-consumer channels, aligning our selling materials and messaging with our commitment to transparency and sustainability, and refining our core value proposition to emphasize and educate the consumer about our high-quality farm direct and responsibly grown products. We have also expanded our product offerings by launching our BioAstin Hawaiian Astaxanthin and Hawaiian Spirulina in new convenient gummy formats. As we look forward to the next year and the increasing interest we are currently seeing in our products, along with the new product offerings, we are now turning our focus to meeting this demand with a well-managed increase in supply. We have preliminarily secured the financing to ensure we can meet market demand. Now I'd like to turn over the call to Felicia to discuss the financials. Felicia, please?

Thank you, Matt. In the fourth quarter of this fiscal year, net sales were $6 million as compared to $5.4 million last year an increase of $579,000 or 10.7%. The total sales for the fiscal year were $23.1 million as compared to $23.2 million last year, which is a slight decrease of 0.5%. Gross profit for the fourth quarter of fiscal 2024 was $675,000, with a gross profit margin of 11.3% compared to a gross profit of $1.4 million and gross profit margin of 25.7% in the fourth quarter of fiscal 2023. Total gross profit for the fiscal year was $5.9 million with a gross profit margin of 25.8% as compared to $7.3 million with a gross profit margin of 31.3% last year. The 5.5 percentage point decrease compared to fiscal 2023 was a result of higher cost per kilogram of astaxanthin and spirulina due to lower overall production volumes as we closely align consumer demand and production as well as write-downs of purchased third-party material, higher-than-normal excess capacity and lower of cost or market adjustment for spirulina given the high cost per kilogram. Fourth quarter operating loss was $1.9 million compared to an operating loss of $1.3 million in the fourth quarter of the prior fiscal year. For the full year, operating loss was $4.6 million compared to an operating loss of $2.9 million in the prior fiscal year, primarily related to a lower gross margin. Net loss for the fourth quarter was $2.1 million or $0.30 loss per share compared to a net loss of $1.4 million or $0.23 earnings per share in the prior year. Net loss for the full year was $5.3 million or $0.81 per share compared to a net loss of $3.4 million or $0.55 per share in the prior year. The company ended the current fiscal year with cash of $707,000 and working capital of $2 million as compared to $974,000 and $5.4 million, respectively, as of March 31, 2023. I'll hand the call back to Matt for concluding comments. Matt?

We have not had any questions. Thank you for attending the call. Please stay safe and healthy. Aloha.