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A local producer of microalgae-based nutrition and health products managed to earn a small profit in its fiscal second quarter that compared with a larger, though still modest, profit a year earlier.
Kailua-Kona-based Cyanotech Corp. reported earning $14,000 in the three months ending Sept. 30, down from $63,000 in the same period last year.
The company said its revenue rose 7 percent to $8.5 million in the recent quarter from $7.9 million a year earlier. But net income was pulled down in part by increased costs, including $225,000 tied to a new processing plant that extracts a key component from microalgae called astaxanthin.
Cyanotech paid $3.2 million for the extraction system and began operating it in June. The system is replaces an outsourcing model that had Cyanotech shipping its Hawaii-grown microalgae to the mainland and New Zealand to extract the astaxanthin, which was then shipped back to Hawaii. However, starting up the new system took longer than expected and led to $225,000 in additional outside processing costs in the recent quarter.
Cyanotech also noted that another initiative to improve production capacity, which includes adding more ponds in which to grow microalgae, is scheduled to be finished by the end of this month.
"Although investments in these initiatives negatively impacted our profitability in the second quarter, they are expected to position us well for the future," Brent Bailey, company president and CEO, said in a statement.
Shares of Cyanotech stock closed Thursday at a 52-week low of $5.60 after the earnings announcement, unchanged from Wednesday. Tuesday’s closing price was $5.74. The stock’s high within the last 52 weeks was $10.25 on June 26.
