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Cyanotech Corp., a local producer and seller of nutritional microalgae, recently ended a disappointing fiscal year with a $3.6 million loss and has begun its new fiscal year with a new chief executive.
The Hawaii island-based company said its loss in the fiscal year ended March 31 compared with a $1 million profit the year before and was substantially due to forced water conservation in its algae ponds as well as “errors in cultivation judgment and execution.”
These difficulties reduced algae production and led to sales falling 11.5% to $30.2 million in the recent fiscal year from $34.1 million a year earlier.
Cyanotech’s recently ended fiscal year began with a production halt from April to mid-May 2018 after unusually cool, cloudy and rainy weather led to abnormally small algae that was difficult to harvest and contributed to a $1.3 million loss in the company’s fiscal first quarter. The next two quarters yielded a $1.1 million loss and a $288,000 profit, respectively.
Last week Cyanotech reported a $1.5 million loss in its fiscal fourth quarter ended March 31 stemming from sales that slipped to $6.1 million from $8.1 million a year earlier.
In response to the difficulties, Cyanotech announced in its financial report last week that it has instituted strategic cost cutting that includes eliminating vacant positions and reducing the number of production ponds temporarily to cut variable production costs and shrink inventory levels.
The company also disclosed in April that a firm controlled by Michael Davis, Cyanotech’s board chairman and largest stockholder, loaned Cyanotech $1.5 million to address reductions in available cash that resulted from sales declines.
Another change the company made was to its leadership. Mawae Morton agreed April 22 to resign as CEO on May 22.
Gerald Cysewski, Cyanotech’s founder, shifted from his positions as chief scientific officer and executive vice president to become CEO with no additional compensation. The company does not have a president.
Cysewski, who has served as Cyanotech’s CEO in the past, said in a statement that efforts to improve processing and quality are ongoing.
”We can report that spirulina production has now stabilized, and subsequent to our fiscal year end, customer orders have returned to a more normal pattern,” he said.
Shares of Cyanotech last closed Monday at $2.93.
FISCAL 2019 LOSS
$3.6 million
YEAR-AGO NET
$1 million
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