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Cyanotech Corp. Message Board

  • wright.tom64 wright.tom64 Aug 11, 2011 8:35 AM Flag

    Looks like another pretty good report

    Sales up especially on astaxanthin products but also somewhat on Spirolina. Inventory reduced and cash on hand in better shape. Margins were weaker but management says that should improve.

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    • "Gross Margin was a disappointing 35% (-8 pts) largely due to lower Spirulina production over the last three quarters and should improve as we sell our higher cost inventory and production levels return to normal." Bailey says

    • That's right no bioreactors at Cyanotech. They'd never make a profit with them.
      I'm not sure if it is sub-standard product or simply getting closer to the expiration date.
      Anyways, it's also interesting to note that there was " an increase of 94% in bulk astaxanthin sales" so sounds like they are selling bulk to other companies who then package it or mix it with their own product.
      I just hope the profit grows.

    • There was reference to lower-quality inventory in the March-quarter earnings release.

      Given that inventories declined sharply again in the June quarter and margins were weaker, I have assumed that this process continued.

      I did see some reference to June quarter production problems.

      Maybe the vog was thick.

      Gross margin was down 8 percentage points YoY, it appears.

      aa

    • Alex, I understand the need to get rid of the excess inventory. Do you know to what extent it was declared sub standard as that seems to fly in the face of our claims of superiority of product. If it was substandard why was it accepted or used and by whom?

    • This company does not use "bio-reactors."

      All of CYAN's production takes place in outdoor culture ponds.

      There should be space to add some additional ponds if there is demand.

      The opportunity is from shifting sales from lower-margined bulks sales into higher-margined branded product sales.

      Margins are down now because alot of the sales appear to have been liquidation of sub-standard quality inventory into the bulk market. It remains to be seen how durable the improvement in branded product sales will be.

      jmho

      aa

    • I have seen the Bioastin product featured on more website catalogs, e.g. Swanson's carries it now. But the margins on these "sales" are lower.
      I am pleased with the qtr report overall. Soon, maybe, they will even provide future guidance. But I won't hold my breath. CYAN has been my best stock in terms of weathering the recent market downturn.

    • This is going to be a skyrocket. if we see the astaxanthin's sales growth, near to 100 % quarter

      to

      quarter. The problem will be the capacity production, but with a good cash flow ratio, like it s seems to be now, will not be a problem to install some bioreactors to improve the production. The world is changing and we are changing with him.Algae Power^

    • :-) My thoughts exactly. I despaired of ever seeing this 4 dollar level again but I believe we are on the right track. Still rating this a cautious buy.

    • The stock has held up very, very well in this very, very poor market.

      Did I mention its been a poor market and CYAN has held up pretty well?

      aa

    • ---and with that math alex one could now recount some of the reasoning behind the strength in the stock price(prior to the market meltdown of the past week that is).

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