Cyanotech(US:CYAN)2025-11-10 21:02Financial Performance - Net sales for the three months ended September 30, 2025, increased to $6,976,000, a 19.3% increase from $5,845,000 in the same period of 2024[14] - Gross profit for the six months ended September 30, 2025, was $4,166,000, compared to $2,956,000 for the same period in 2024, reflecting a 40.7% increase[14] - The company reported a net income of $1,000 for the three months ended September 30, 2025, compared to a net loss of $1,150,000 for the same period in 2024[14] - For the six months ended September 30, 2025, the net loss was $925,000, a decrease from a net loss of $2,352,000 in the same period of 2024, representing a 60.7% improvement[20] - Total net sales for the three months ended September 30, 2025, were $6,976,000, representing an increase of 19.3% compared to $5,845,000 for the same period in 2024[53] - For the six months ended September 30, 2025, total net sales reached $12,797,000, a 9.0% increase from $11,743,000 in 2024[54] Cash and Liquidity - Cash balance increased to $649,000 as of September 30, 2025, from $257,000 as of March 31, 2025, showing a significant improvement[12] - The company had a working capital of $39,000 as of September 30, 2025, a significant decrease from $302,000 as of March 31, 2025, indicating liquidity challenges[28] - Cash at the end of the period was $649,000, down from $780,000 as of September 30, 2024, indicating a decrease of 16.8% year-over-year[20] - Net cash used in operating activities was $220,000 for the six months ended September 30, 2025, compared to $201,000 for the same period in 2024, reflecting a 9.5% increase in cash outflow[20] - The company continues to face challenges with operating losses and negative cash flows, raising substantial doubt about its ability to continue as a going concern[122] Expenses and Costs - Operating expenses for the three months ended September 30, 2025, were $2,203,000, a decrease of 10.2% from $2,454,000 in the same period of 2024[14] - Operating expenses totaled $4.7 million for the six months ended September 30, 2025, a decrease of approximately 4.9% compared to the prior year[120] - The company incurred $360,000 in interest payments during the period, an increase from $330,000 in the same period of 2024, representing a 9.1% rise[20] - Interest expense for the six months ended September 30, 2025, was $(361,000), compared to $(336,000) for the same period in 2024, indicating a slight increase in interest costs[14] Assets and Liabilities - Total current assets as of September 30, 2025, were $11,931,000, up from $10,545,000 as of March 31, 2025, indicating an increase of 13.2%[12] - Total liabilities increased to $15,962,000 as of September 30, 2025, compared to $14,606,000 as of March 31, 2025, representing an increase of 9.3%[12] - The accumulated deficit as of September 30, 2025, was $(27,029,000), compared to $(26,104,000) as of March 31, 2025[12] - The company had $4,200,000 outstanding borrowings on a related party loan facility as of September 30, 2025, compared to $3,000,000 as of March 31, 2025, indicating a 40% increase in debt[29] - Total debt as of September 30, 2025, was $8,420,000, including $370,000 in short-term bank debt and $4,200,000 in related party line of credit[63] Sales Breakdown - Packaged sales for the three months ended September 30, 2025, totaled $4,573,000, up 8.7% from $4,206,000 in 2024[53] - Bulk sales for the three months ended September 30, 2025, increased significantly to $2,359,000, a 75.7% rise from $1,342,000 in 2024[53] - Bulk sales of astaxanthin increased by 142.6% to $1,533,000, while spirulina bulk sales rose by 16.3% to $826,000 for the three months ended September 30, 2025[112] - Three customers accounted for 22%, 14%, and 11% of total net sales for the six months ended September 30, 2025, highlighting a concentration risk in revenue generation[44] Stock and Shares - The company had 7,392,243 shares outstanding as of September 30, 2025, an increase from 7,199,908 shares as of March 31, 2025[12] - Basic and diluted net income per share for the three months ended September 30, 2025 was $1, with 7,293 shares outstanding, while for the same period in 2024, the net loss per share was $(1,150) with 7,004 shares[95] - For the six months ended September 30, 2025, the basic and diluted net loss per share was $(925) with 7,252 shares, compared to a net loss of $(2,352) with 6,976 shares for the same period in 2024[96] Operational Insights - The Company is a leader in the production of natural products derived from microalgae, emphasizing quality and environmental sensitivity in its operations[106] - The production facility on the Kona Coast of Hawaii allows for year-round harvest of microalgal products in a cost-effective manner due to favorable growing conditions[109] - The company aims to stabilize production volume and rationalize market channel participation while focusing on higher margin consumer products[137] - The company is exploring opportunities for bulk sales orders for spirulina and astaxanthin, both domestically and internationally[137] Future Outlook and Risks - Future results may fluctuate due to various risks, including changes in customer order patterns and increased competition[141] - The gross profit margin may decline in future periods due to lower production volumes and increased input costs[138] - Inflationary factors have led to overall lower demand as consumers manage discretionary spending, impacting operations[144] Compliance and Governance - The Company was not in compliance with the debt service coverage ratio as of March 31, 2023, 2024, and 2025, but received waivers from the Bank for these violations[71] - There were no changes in internal control over financial reporting that materially affected the company during the quarter ended September 30, 2025[149] - The company has not experienced any significant legal matters outstanding as of September 30, 2025[151]