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(NASDAQ:CYAN) Q2 2012 - Record Sales, Net +66%. The Little Engine That Could.

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November 17, 2011 – Comments (12) | RELATED TICKERS: CYAN , ABT , BMY

(NASDAQ:CYAN) Q2 2012 - The Little Engine That Could

 

Cyanotech again delivered impressive numbers across all metrics for Q2 ending September 30.Good job.

Since Cyanotech annoumced Q1 2012 numbers ending June 30 on August 11th Cyanotech shares have increased 48.6% ($3.95 to $5.87 as of yesterday's (11/16) close)*.

 

It's ALL about Superior Perceived Value.

Based on the past two quarters CYAN appears to be growing into a legitimate neutraceutical. Brent Bailey must ensure that happens and with surgical laser precision unequivocally establishing CYAN as a serious player starting with immediately distancing itself from looking like a fringe alternative health company to a major healthcare industry leader and player. Along that line, Cyanotech's Nutrex-Hawaii is suggesting a new site is pending as of November 17, 2011. I like Dr. Corish, Nutrex-Hawaii's Medical Director, but he is not doing himself any favors with the existing website. Zero credibility. Worse.

I recommend existing and prospective shareholders to look at this Youtube video of Dr. Corish on Astaxanthin. Curious this video does not prominently appear on the Nutrex-Hawaii site. Equally confounding is the fact there is no substative/any discussion of Nutrex-Hawaii on Cyanotech's main site. How could this escape CYAN management? Hopefully not a smoking gun. This would not have escaped any Fortune 500 CEO and that is EXACTLY how Brent Bailey simply must be thinking. Again, I take you to the main marketing site on Cyanotech.com. OMG it's still there!? qed. To the Cyanotech Board of Directors and Management, What are you thinking? 

Nutrex-Hawaii's MD Formulas is also a winner and [should] be huge going forward. Cyanotech needs to accordingy make some strategic hire's in Sales, Operations, and R&D at the highest levels.

Building the Pipeline

Cyanotech must also get away from continually mentioning Dr. Oz accounting for their growth and establish credibility with their shareholders that CYANs growth is a result simply of a superior management team. In addition, CYAN cannot rely on Dr. Oz for their future and should be aggressively building an intellectual warchest of Ph.D entrepreneurs in establishing new products e.g. Algae Biofuel, line-extensions of existing products based on BioAstin and Hawaiin Spirulina Pacifica, and capitalizing on existing clinical studies suggesting Cyanotech’s Spirulina Pacifica® May Counter Anemia and Declining Immune Function in Persons Over Age 50 [Source: Cellular & Molecular Immunology, January 31, 2011].

The Little Engine That Could. Cyan will either become the neutra/pharmaceutical it should be and be positioned for acquisition by (NYSE:ABT) or (NYSE:BMY) or never get past single-digits per share and peak due to a mindset based on the fact CYAN has effectively not created shareholder value for approximately thirty years. There simply is lingering evidence CYAN is still being run with the mindset of a privately-held family-run vitamin store in a non-descript strip mall and may not have the bandwidth nor management depth to take it to the next step. Hopefully Dr. Chen** will have substantive influence with this.

 

* (Q2 Ending September 30, 2011)

"...Second Quarter 2012
For the second quarter of fiscal 2012 compared to the second quarter of fiscal 2011, revenues were $5,989,000 compared to $3,834,000. Gross profit was $2,790,000, with gross profit margin of 47%, compared to gross profit of $1,652,000 and gross profit margin of 43%. Net income was $875,000 or $0.16 per diluted share, compared to net income of $526,000 or $0.10 per diluted share.

Six Months 2012
For the first six months of fiscal 2012 compared to the first six months of fiscal 2011, revenues were $11,939,000 compared to $7,690,000. Gross profit was $4,894,000, with gross profit margin of 41%, compared to gross profit of $3,311,000 and gross profit margin of 43%. Net income was $1,361,000 or $0.25 per diluted share, compared to net income of $925,000 or $0.17 per diluted share.

Trailing 12 Months
For the trailing 12 months ended September 30, 2011, compared to the trailing 12 months ended September 30, 2010, revenues were $21,076,000 compared to revenues of $15,486,000. Gross profit was $7,924,000, with gross profit margin of 38%, compared to gross profit of $6,449,000 and gross profit margin of 42%. Net income was $2,166,000 or $0.40 per diluted share, including a non-cash tax benefit of $552,000 due to a reduction in the deferred tax valuation allowance and recording of a net deferred tax asset in the fourth quarter of fiscal 2011, compared to $1,304,000, or $0.26 per diluted share. Income before the income tax benefit was $1,623,000 compared to $1,326,000.

Commenting on the second quarter results, Brent Bailey, President and CEO, said “We’re pleased with our progress on key measures in the second quarter compared to the second quarter of fiscal 2011:Net sales reached a record $5,989,000 (+$2,155,000 and +56%)Gross margin increased to 46.6% (+3.5 pts.)Net Income grew to $875,000 (+$349,000 and +66%)Cash increased to $4,091,000 (+$3,308,000 and +422%)Inventory declined to $3,188,000 (-$1,425,000 and -31%)

In addition, our Nutrex-branded sales grew 73% and represented 37% (+3 pts.) of our net sales.”

For the second quarter of fiscal 2011, Spirulina sales accounted for 40% of total revenues and natural Astaxanthin sales for 60%. International sales were 27% of total sales..." Source: Cyanotech.

 

** Thomas F. Chen named to CYAN's Board of Directors. Cyanotech Files SEC Form 8-K.

12 Comments – Post Your Own

#1) On November 17, 2011 at 2:56 PM, gnulaw (53.41) wrote:

CORRECTION:

 

>>Since Cyanotech annou[n]ced Q1 2012 numbers

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#2) On November 23, 2011 at 10:52 PM, gnulaw (53.41) wrote:

CYANs PE and ROE for the ttm ending Sep 30 are 13.74 and 17.00, respectively. Projected PE for Q3 ending December 31 should be around 11.1 assuming $500k net, 5.5M shares outstanding*

                PE    ROE     Quar Rev Growth     Quar Earn Gr

CYAN       13.7    17.0        54.3%                  21.8%

ABT         18.0    19.7        13.2                   -66.00%

BMY         15.5    30.2        11.4                      2.1%

 

*Source: Cyanotech SEC Form 10Qs for Q1, Q2 2012 ending Jun 30 and Sep 30, respectively, SEC Form 10K Fiscal 2011 ending Mar 31, Q3 2011 ending Dec 31 2010,

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#3) On November 23, 2011 at 10:59 PM, gnulaw (53.41) wrote:

CORRECTION

>>Q3 2011 ending Dec 31 2010,

 

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#4) On November 27, 2011 at 7:52 PM, gnulaw (53.41) wrote:

Updated numbers for CYAN based on Q2 2012 ending Sep 30 numbers re: earnings growth, ROE

 

                PE*     ROE     Quar Rev Grwth    Quar Earn Gr

CYAN       13.5    18.9        56.2%                  66.3%

ABT         18.0    19.7        13.2                    -66.00%

BMY         15.5    30.2        11.4                      2.1%

* trailing

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#5) On December 09, 2011 at 1:34 PM, gnulaw (53.41) wrote:

>>Since Cyanotech annoumced Q1 2012 numbers ending June 30 on August 11th Cyanotech shares have now increased 93.4% ($3.95 to $7.64 as of yesterday's (12/8) close)*.

What's happening?  CYAN is firing on all Financial metrics (ROE, PE, quarterly earnings and sales growth, and dominance of Astaxanthin production and, significantly, FDA approval:

Key Considerations:

1. Burgeoning baby boomer population concerned with health and longevity (see 2 below).This segment should (management depth)/will accordingly look to Cyanotech, Nutrex-Hawaii MD Formulas branded products.

2. CYAN appears to be the leader to everything neutraceutical where it is at a tipping point of becoming the defacto neutraceutical and the Company that legitimized this (holistic health vs. Big Pharma) market viz-a-viz Cyanotech was the first microalgae company in the world to obtain quality management standards ISO 9001:2000 certification and is GMP-certified by the Natural Products AssociationTM. Cyanotech's BioAstin was the first source of astaxanthin for human nutrition reviewed by the U.S. Food and Drug Administration (FDA). In August 1999, BioAstin completed a review by the FDA without objection and was allowed to be sold in the United States as a dietary supplement. Visit www.cyanotech.com for more information.

3. Nutrex-Hawaii aka CYAN management depth is a smoking gun. Per CYANs Q2 2012 release  management stated "...our Nutrex-branded sales grew 73% and represented 37% (+3 pts.) of our net sales.”

For the second quarter of fiscal 2011, Spirulina sales accounted for 40% of total revenues and natural Astaxanthin sales for 60%. International sales were 27% of total sales..."

Takeaways here are CYAN's retail division grew 73% accounting for 37% of net sales yet still has this tragic eCommerce website ala the 1950 x-ray vision ads. Pure crap. Blinking HTML!? That was virtually banned in the early 1990's. HUGE SMOKING GUN. Goes to Brent Bailey's mindset in particular and CYAN management depth in general (See post above re: Thomas Chen).

So what/who is behind the recent dramatic rise in market cap? Professional traders manipulating the stock? New market makers/analysts following CYAN, and or legitimate accumulation based purely on impressive fundamentals it is currently delivering.

 

 

 

 

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#6) On December 09, 2011 at 6:02 PM, gnulaw (53.41) wrote:

CYAN traded over 200,000 shares (on close to eight times its Average Daily Volume (3 months average)  and north of $1.6M today, in addition to establishing another intra-day 52-week high, Impressive.

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#7) On December 10, 2011 at 3:12 PM, gnulaw (53.41) wrote:

>>Takeaways here are CYAN's retail division grew 73% accounting for 37% of net sales yet still has this tragic eCommerce website ala the 1950 x-ray vision ads. Pure crap. Blinking HTML!? That was virtually banned in the early 1990's. HUGE SMOKING GUN.

The blinking HTML appears to have been disabled. Someone is paying attention. This says a lot. Is key. Hopefully for the right reasons.

Equally disconcerting is the fact that Christmas 2011 marks the beginning of a new eCommerce era...and Nutrex-Hawaii effectively has neither an eCommerce website nor a moble platform. Another disturbing fact and HUGE (depth of management) SMOKING GUN. 

 

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#8) On December 11, 2011 at 12:12 PM, gnulaw (53.41) wrote:

Update, as of December 10, 2011.

CYANOTECH: Shares Outstanding 5,406,000
52 Week Range: $2.55 - 8.90
Market Cap: $46.43M



Ownership Summary:

Michael A. Davis  SCHEDULE 13G/A Filing Date 6/2/2011. 1.059,432 shares. 19.65% of class.


Andrea kongsgaard Flaaten  VitaeLab AS, Helse, Telecom, Mr. Flaaten and Mr. Bern are together referred to as the “Reporting Persons.”  - Schedula 13D/A May 17, 2011 Filing Date 5/31/2011 0 shares.
Note: SEC FORM SC 13D/A Filing date 6/11/2008 Shares Held 507,666 9.7% of class.

Rudolf Steiner Foundation, SEC FORM SC 13G/A, Filing Date 6/14/2011. 736,364 shares. 13.66% of class.


WILMINGTON TRUST CO, 938,419 shares For period 9/30/2011.Source: NASDAQ.com/ All new shares.  17.38% of class.
WILMINGTON TRUST CO 838,419 shares, SEC Form SC 13G/A Filed 2/14/2011 15.5% of class.Note: Held 11.9% (628,319 shs 2/16/2010 SC 13G/A Filing.


19.65 - Davis
13.66 - Rudolf Steiner Foundation
17.38 - WILMINGTON TRUST CO
=====
50.69 % of class

Float: 3.45M shares

Source: NASDAQ.com  finance.yahoo.com

 

Q: Relationship between Vitaelab AS (divested all CYAN shared) and Greg Robertson (immediately preceding CEO let go for cause?) ???

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#9) On December 12, 2011 at 7:28 PM, gnulaw (53.41) wrote:

>>Q: Relationship between Vitaelab AS (divested all CYAN shared) and Greg Robertson (immediately preceding CEO let go for cause?) ???

 

CORRECTION: Andrew Jacobson NOT Greg Robertson ref/

"...effective February 27, 2010, the Board of Directors elected to remove Andrew H. Jacobson from his responsibilities as President and Chief Executive Officer of the Company. Effective February 27, 2010, the Board of Directors appointed David I. Rosenthal, age 55, to serve as the Company's Interim President and Chief Executive Officer until the Board has selected and employed an individual to serve as the Company's new President and Chief Executive Officer; a search has been initiated..." Source:

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#10) On December 17, 2011 at 9:09 AM, gnulaw (53.41) wrote:

Cyanotech releases 12 mg BioAstin in old/bad packaging/branding and disappointingly and disturbingly not under the MD Formulas Brand ?!?! And Nutrex-Hawaii [still*] not updated.

 

* Equally disconcerting is the fact that Christmas 2011 marks the beginning of a new eCommerce era...and Nutrex-Hawaii effectively has neither an eCommerce website nor a moble platform. Another disturbing fact and HUGE (depth of management) SMOKING GUN [ref/ Comment #6].

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#11) On December 17, 2011 at 9:30 AM, gnulaw (53.41) wrote:

>>Cyanotech releases 12 mg BioAstin in old/bad packaging/branding and disappointingly and disturbingly not under the MD Formulas Brand ?!?! And Nutrex-Hawaii [still*] not updated.

 

25 and 50 gel caps ?! NOT [UNIVERSALLY] Standard 30 and 60?! WOW. [No] Management Depth?

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#12) On June 01, 2012 at 6:51 PM, gnulaw (53.41) wrote:

>>Cyan will either become the neutra/pharmaceutical it should be and be positioned for acquisition by (NYSE:ABT) or (NYSE:BMY) or never get past single-digits per share and peak due to a mindset based on the fact CYAN has effectively not created shareholder value for approximately thirty years. There simply is lingering evidence CYAN is still being run with the mindset of a privately-held family-run vitamin store in a non-descript strip mall and may not have the bandwidth nor management depth to take it to the next step. Hopefully Dr. Chen** will have substantive influence with this.

Source: Nov 17, 2011, above post.

Note: (Cyanotech:CYAN) closed at $6.97 today, down from its 52-week high of $11.84.

QED?

 

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