Cyanotech (NASDAQ:CYAN) Sustains Profits and Leads Gainers

Cyanotech Corporation (Nasdaq Capital Market: CYAN), a world leader in microalgae-based, high-value nutrition and health products, recently announced financial results for the second quarter and first six months of fiscal 2011, ended September 30, 2010. CYAN is one of leaders in percentage gains today as buyers are searching out profitable companies with solid fundamentals to invest in… As I write, shares of CYAN are up 17 percent at $2.99 per share on heavy volume of more than 125,000 shares compared to its average daily volume of only 10,000 shares.

For the second quarter of fiscal 2011 compared to the second quarter of fiscal 2010, revenues were $3,834,000 compared to revenues of $3,925,000. Gross profit was $1,652,000, with gross profit margin of 43%, compared to gross profit of $1,762,000 and gross profit margin of 45%. Net income was $526,000, or $0.10 per diluted share, compared to $599,000, or $0.11 per diluted share.

“We are pleased with Cyanotech’s solid performance in the second quarter of fiscal 2011, and we saw key positive trends reflecting our new sales and marketing initiatives,” said David I. Rosenthal, Interim President and CEO. “International sales of bulk products were down slightly in the second quarter, which we believe resulted from the timing of orders by major customers. At the same time, our U.S. mainland sales of Nutrex Hawaii-branded consumer products, in which we are focusing on retail outlets, grew 15% from the first quarter of fiscal 2011 to the second quarter. A portion of this success can be attributed to our new program instituted during the second quarter where we are actively educating domestic retailers on the benefits of Cyanotech’s products.”

Rosenthal added, “On the production side, we continue to generate good yields, which will enable us to meet increased demand for our products.”

Cash and cash equivalents were $783,000 at September 30, 2010 compared to the March 31, 2010 balance of $817,000. Working capital increased to $5,950,000 at September 30, 2010 compared to $4,942,000 at March 31, 2010.