Cyanotech starts fiscal 06 on form

By Jess Halliday

- Last updated on GMT

Related tags Carotenoid Revenue Astaxanthin

Better results for Cyanotech in its first quarter 2006 suggest that
it is recovering from the short, sharp shock dealt to the Japanese
aquaculture market by last year's typhoon. The adaption of its
microalgae facilities should mean that the Hawaiian company is in a
better position to weather the vagaries of market trends in the

Sales for the quarter increased 12 percent over the prior year period to $3.03 million, and operating income rose an impressive 29 percent to $161,000.

The results for full year 2005 were disappointing by the company's​ admission. One of the main reasons for this was the unprecedented bad weather in Japan - the company's main animal feed market which, in turn, accounts for a higher proportion of the company's sales than does human nutrition.

Combined with the costs of the facilities maintenance and expansion and a hefty R&D bill, this setback meant that Cyanotech showed no growth for the year - although it did still manage to maintain sales around the $11 million mark for the 12 months.

Despite sales having picked up in this area in 1Q 2006, chairman, president and CEO Bob Cysewski said the company "remains cautious"​ about the recovery rate of that market.

Bob Capelli, VP of sales, told that ten ponds have been converted from spirulina to astaxanthin production - a move that should mean the company can protect itself should unforeseen circumstances arise again.

"The demand for spirulina has been tremendous lately, the demand for human astaxanthin has been increasing rapidly,"​ he said. "We have made the infrastructure such that we can easily convert back and forth from astaxanthin to spirulina according to the demand."

Cysewski also said that the company's reputation for quality, established over 20 years of producing Spirulina pacifica.

The company has been active in the astaxanthin market since 1996 and its supercritical CO2 extract oleoresin comes in 5 and 7 percent levels, as well as in microencapsulated, tablet-grade beadlet form.

Unlike some of the astaxanthin complex products on the market which, according to Capelli, include other carotenoids in its titer percentage such as lutein, beta-carotene and canthaxanthin, Cyanotech counts only the astaxathin. This, he says, means that customers may assume it is inferior quality to competing products claiming to be 10 percent astaxanthin, but in fact the carotenoid profile is identical.

As to the outlook for the rest of the fiscal year, Cysewski is aiming for a rosy overall picture:

"Our results may vary from quarter to quarter,"​ he said, "but our goal is to achieve annual revenue growth and increase profitability".

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