Cyanotech - Earnings Call - Q1 2026

Transcript

Speaker 1

Aloha from Kona, Hawaii. Thank you all for joining us today to report Cyanotech Corporation's first quarter fiscal year 2026 earnings results. I am Matt Custer, President and Chief Executive Officer of Cyanotech Corporation. Joining me on the call today is Jennifer Rogerson, our Chief Financial Officer. I will turn the call over to Jennifer to provide our forward-looking statement.

Speaker 0

Thanks, Matt. Our discussion today may include forward-looking statements. We do not undertake any obligation to update forward-looking statements, either as a result of new information, future events, or otherwise. Our actual results may differ materially from what is described in these forward-looking statements. Some of the factors that may cause results to differ are listed in our publicly filed documents. For additional information, we encourage you to review our 10-Q and fiscal year 2025 report filed with the Securities and Exchange Commission. I will turn it back to Matt for comments on the quarter. Matt.

Speaker 1

This quarter's net sales declined 1.3% compared to the same period last year. However, improved production efficiencies and continued disciplined inventory management drove a 20% increase in gross profit, while operating expenses remained flat. As a result, the company reported a 23% improvement in net loss. Compared to the prior year, our sales mix did shift meaningfully. Bulk spirulina and bulk astaxanthin sales increased by 48% and 49% respectively, reflecting a renewed demand in the ingredients channel for U.S.-sourced material. This growth was partially offset by a 12% decline in packaged product sales. We remain focused on executing our long-term strategy. This includes driving brand value through differentiated storytelling, deepening relationships in e-commerce and bulk ingredient markets, and focusing on sustainable cash flows. As we navigate the continued macroeconomic challenges, I am proud of the resilience of our team, as shown in confidence in the progress that we are making.

Turning over to Jennifer to discuss the financial results. Jennifer.

Speaker 0

Thank you, Matt, and good evening, everyone. Key financial results for the first quarter of fiscal year 2026. In the first quarter of this fiscal year, net sales were $5.8 million as compared to $5.9 million last year, a decrease of $78,000 or 1.3%. Gross profit for the first quarter of fiscal 2026 was $1.8 million, with a gross profit margin of 30.5% compared to a gross profit of $1.5 million and a gross margin of 25% in the first quarter of fiscal year 2025. The 5.5% increase was a result of higher efficiencies in production, driving our costs down. First quarter operating loss was $753,000 compared to an operating loss of $1 million in the first quarter of the prior fiscal year.

Net loss for the current quarter was $926,000 or $0.13 per diluted share loss, compared to a net loss of $1.2 million or $0.17 loss per diluted share in the prior year. The company had cash of $383,000 and a negative working capital of $255,000, compared to $257,000 and $302,000 respectively in the prior year. I will hand the call back to Matt for concluding comments. Matt.

Speaker 1

We have not received any questions. Thank you for joining today's call. Aloha.