Cyanotech Corp., a Kona-based producer of health dietary supplements from microalgae, posted a 37.7% drop in sales during its fiscal third quarter from the year-ago period, but its top executive said Thursday he was encouraged by improved results from the previous three months.
“Sales in the third quarter improved by $712,000, or 14%, compared to the second quarter, as we saw modest improvement in consumer movement on both finished goods and bulk sales,” Cyanotech President and CEO Matthew Custer said in a statement. “However, both of our online finished good sales and our international bulk sales are still not performing to historical levels.”
Cyanotech lost $598,000 in the October-December period, compared with a profit of $386,000 during the same time frame in 2021. Sales fell to $5.9 million in the quarter versus $9.5 million a year ago.
Custer said internationally as global supply chain issues eased, customers made adjustments that affected Cyanotech’s bulk sales.
”The inventory levels have improved but are still a headwind,” he said. “We are focused on taking steps and making changes to improve these sales channels.”
Custer said cash-saving initiatives that the company implemented in the second quarter, including slowing production and reducing headcount, were not fully realized until late in the third quarter, due to material lead times and payment terms. However, he said the company’s working capital remains strong due to higher inventories that have long expiration dates. The company cut its operating expenses 20.6% during the quarter from a year ago.
Cyanotech produces BioAstin, Hawaiian Astaxanthin and Hawaiian Spirulina Pacifica.
Shares fell 13 cents to $1.17 after the earnings were announced.
THIRD-QUARTER LOSS
$598,000
YEAR-EARLIER NET
$386,000
