Cyanotech Corporation, based in Kailua-Kona, Hawaii, reported its financial results for the second quarter of fiscal year 2025, ending September 30, 2024. The company specializes in producing natural products derived from microalgae, primarily targeting the dietary supplements market with key products such as Hawaiian Spirulina Pacifica® and BioAstin® Hawaiian Astaxanthin®.

For the three months ended September 30, 2024, Cyanotech's net sales decreased by 8.3% to $5,845,000, down from $6,373,000 in the same period of the previous year. However, for the six-month period, net sales increased by 1.9% to $11,743,000 compared to $11,519,000 in the prior year. The decline in quarterly sales was attributed to a significant drop in packaged sales, which fell by 20.5%, while bulk sales increased by 38.9%. The company also saw a notable rise in revenue from contract extraction and R&D services, which surged by 156.0% in the third quarter.

Gross profit for the three months ended September 30, 2024, was $1,479,000, a decrease from $2,088,000 in the prior year, reflecting a gross profit margin decline of 7.5 percentage points. For the six-month period, gross profit decreased to $2,956,000 from $3,620,000. Operating expenses for the third quarter were reduced to $2,454,000 from $2,720,000, yet the company still reported a loss from operations of $(975,000), compared to $(632,000) in the same quarter of 2023. The net loss for the quarter was $(1,150,000), up from $(797,000) in the previous year, while the six-month net loss increased to $(2,352,000) from $(2,166,000).

Cyanotech's total assets as of September 30, 2024, were $23,913,000, down from $25,112,000 at the end of the previous fiscal period. Total current liabilities increased to $9,575,000 from $8,554,000, and total stockholders’ equity decreased to $9,692,000 from $11,814,000. The company reported cash of $780,000, a slight increase from $707,000 as of March 31, 2024.

Strategically, Cyanotech has implemented cost-saving initiatives, including inventory production adjustments based on customer demand and maintaining reduced headcount through attrition. The company has also made changes to its sales and marketing team, appointing a new Chief Commercial Officer. Additionally, it raised capital through a private placement in the third fiscal quarter of 2024. Despite these efforts, the company continues to face operational losses due to macroeconomic impacts and lower consumer demand, necessitating reliance on funding sources for liquidity.