The company achieved year-end revenues of $184.5 million, up from $114.7 million in 2003. Fourth quarter revenues also increased - up to $59.7 million this year from $38.6 million 12 months ago.
Net income likewise grew, reaching $47.0 million, or $1.55 per diluted share, for fiscal year 2004 compared to $16.0 million, or $0.58 per diluted share, last year. A similar pattern was seen in the fourth quarter when net income rose to $35.3 million, or $1.16 per diluted share, compared to $6.2 million, or $0.21 per diluted share, in 2003.
However, as the company noted, net income for the fourth quarter of 2004 and the year end reflects a one-time, non-cash income tax benefit of $25.2 million.
"Martek continued its robust growth in earnings and revenue in the fourth quarter. This growth is expected to continue throughout 2005 as the Kingstree facility expands production and demand grows from existing and new products," said Henry Linsert, CEO of Martek.
Martek attributed a significant portion of the increase in revenue to higher sales of nutritional products to its infant formula licensees.
Indeed, the company noted that approximately 90 percent of its fourth quarter nutritional product sales were generated from sales of docosahexaenoic acid (DHA) and arachidonic acid (ARA) oils to four of its infant formula licensees: Mead Johnson, Wyeth, Abbott Laboratories and Nestle.
Martek also included in its fourth quarter revenues initial sales of DHA oil for the pregnancy and lactation market as well as $3.6 million related to contract manufacturing revenues generated by the former FermPro business in Kingstree, SC, which was acquired in September 2003.
Gross profit margin on total revenues was 39 percent for the last quarter of 2004 and 2003. The company blamed this stagnation on an increase in the overall cost of ARA due to the continued decline in the dollar against the euro and the continued use of air freight in connection with ARA shipments from Europe.
However, the company said some impact was offset by recent improvements in DHA production and significant growth in the ARA volume received from DSM's Belvidere, New Jersey manufacturing plant.
Martek said it expected gross profit margins to improve in fiscal 2005 as the newly implemented production methods further improve production yields and DSM's Belvidere plant continues to increase its ARA production volumes.
Increased research and development expenses of $1.2 million in the fourth quarter of 2004 compared to 2003 was explained by the company as primarily the result of continuing efforts to lower its DHA production cost. Martek added that R&D costs were also incurred in connection with the development of DHA products for the food and beverage industry and research towards the development of plant-based DHA under a collaboration agreement with SemBioSys.