Q3 2023 Cyanotech Corp Earnings Call

Sinopec joining me on the call today is Felicia Lane, our Chief Financial Officer, I will turn the call over to Felicia to provide our forward looking statement.

Thanks, Matt our discussion today may include forward looking statements, we do not undertake any obligation to update forward looking statements.

As a result of new information future events or otherwise.

Our actual results may differ materially from what is described in these forward looking statements. Some of the factors that may cause results to differ are listed in our publicly filed documents for.

For additional information we encourage you to review our 10-Q in fiscal year 2022, 10-K report filed with the Securities and Exchange Commission.

I'll turn it back to Matt for comments on the quarter Matt.

Sales in the third quarter of $5 million 891000 improved by 712000 or 14%.

Compared to second quarter sales of $5 million 179000, as we saw modest improvement in consumer movement on both finished goods and bulk sales.

However, both of our online finished goods sales and our international bulk sales are still not performing to historical levels on the international bulk sales as the global supply chain issues east customers made adjustments to their inventory levels that impacted our sales.

Inventory levels have improved but are still a headwind we are focused on taking steps and making changes to improve the sales channels.

The cash saving initiatives that we implemented in the second quarter, including slowing production and reducing head count we're not fully realized until late in the third quarter due to material lead times and payment terms. However, our working capital remained strong due to higher inventories to have long expiration dates.

Now I'd like to turn the call over to Felicia to discuss the third quarter Felicia. Please.

Thank you, Matt and good evening everyone.

Net sales for the third quarter of fiscal year, 2023, or $5 million $891000 compared to $9 million $459000 for the third quarter of fiscal year 2022, a decrease of $3 million $568000 or 38%.

Due to the reasons Matt mentioned.

Gross profit for the third quarter of fiscal year, 2023 was $1 million $764000 with a gross profit margin of 29, 9% compared to gross profit of $3 million 238000, and our gross profit margin of 34, 2%.

In the third quarter of fiscal year 2022.

Gross profit as a percent of sales for.

For the third quarter of fiscal year 2023 decreased by four three percentage points compared to the same period last year as a result of higher cost per kilogram of asked advancing <unk> barely now due to the impact of inflation on our underlying costs.

And lower production volumes.

Offset slightly by a reduction in cost based on the cost saving initiatives we implemented.

Operating loss for the third quarter was $404000 compared to operating income of $508000.

Last year, reflecting a decrease of $912000 due to decreased sales and higher costs.

Net loss for the current quarter was $598000 or <unk> 10 cents per diluted share compared to net income of $386000 or <unk> <unk> per diluted share in the prior year.

The company had cash of $513000 and working capital of $9 9 million as compared to $2 6 million and 11 4 million respectively. As of March 31 2022.

I'll hand, the call back to Matt for concluding comments Matt.

We had a question from shareholders and investors, which we will now address in the Q2 filings and operating plan to produce cash flow requirements was mentioned can you. Please discuss the plan its current status and any changes to the plan going forward.

We have implemented a number of cash saving initiatives starting in Q3 of the current fiscal year, we have stopped or slowed production of inventory in alignment with current customer demand reduced head count primarily through attrition and implemented furloughs for certain employees. We have also eliminate some discretionary selling general and administrative expenses.

Thank you for attending the call Aloha.