Cyanotech has reported its 2020 financial highlights. The Hawaiian microalgae producers produce astaxanthin and spirulina for ingredients and supplements.
The US company reported a net sales decrease in Q3 of 25%. Brian Orlopp, Cyanotech Chief Financial Officer, explained that this was owing to inventory build in 2019 and some non-recurring replenishment orders related to the re-inoculation of spirulina ponds.
Orlopp added: “We [also] had an increase in orders at the end of the quarter that will roll-over into the 4th quarter.”
The decreases were partially offset by a 56% increase in spirulina bulk sales as well as contract extraction sales. However, though bulk sales of spirulina were up, Cyanotech saw a decrease in astaxanthin and spirulina packaged sale in the last fiscal year.
Orlopp explained that a factor that may have impacted net sales was the impact on gross income from inclement and cooler weather that impacted production.
Managing costs
The company has been managing these one-time expenses with cost-cutting in other parts of the business. “Operating expenses decreased $1.1 million for the current quarter as compared to the same period last year,” said Orlopp.
Overall costs in all three key areas were down to cost-cutting initiatives with a $662,000 decrease in sales and marketing and $447,000 collectively in General and Administrative and R&D expenses.
Cyanotech’s CEO, Gerald Cysewski, said: “Though our sales for the third quarter are below last year’s unusual level, on a nine-month basis our sales volume and profit margins appear to be normalising. With closer attention to costs and business infrastructure, the company has been generating cash and reducing payables.”
