December 5, 2005
BioAstin Growth Not Enough to Save Cyanotech 2Q
KAILUA KONA, Hawaii
Despite anoverall increase in sales of its BioAstin® astaxanthin, Cyanotech Corp.(NASDAQ:CYAN) suffered decreased revenues and earnings for its second quarterfiscal 2006, compared to a year ago. Sales of $2.5 million were down 16 percentfrom 2Q05 and 17 percent from first quarter 2006. Gross margin narrowed to 23percent from 35 percent last year, dropping earnings to a net loss of $321,000or $0.01 per share, a complete reversal from $153,000 or $0.01 per share in netincome a year ago.
Our lower overall revenue during 2Q 2006 was due largely tofluctuations in the ordering pattern of our spirulina customers as well as toreduced orders for NatuRose from the Sea Bream market in Japan, said GeraldCysewski, chairman, president and chief executive officer (CEO). As aconsequence of the present state of the Japan aquaculture market we areexpanding into other areas such as tropical fish. He added despite thedecrease in BioAstin orders from the companys two largest customers, thebrand grew overall due to its new wholesale, business-to-business marketingfocus. We have launched a new corporate Web site (www.cyanotech.com) withadditional information, thereby increasing the effectiveness of our marketingactivity, he said.
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